Small Limited Co. Accountant Charges

[Cogcog]

What are small (Limited Co.) businesses paying for accountancy?

I run a small busiess (one man consultancy and wife in admin. support) for the past 20 years but I am now heading to retirement in November, so I have deregistered for VAT and generally slowed the business (with the help of Covid19).

I am currently paying £1,200 plus VAT PA to draw up accounts on a turnover of about £140K, they do the P11Dfor me (which will be close to nothing having given up the company car and any travelling now). I was issuing about 10 invoices a month, doing my own VAT until I deregistered, keeping a decent handle on my expenses.

I may still be doing a bit of work after retirement through the company but wondered if I should look for a different accountant as mine has been taken over by a bigger company and they dont seem to have much interest in negotiating price going forward as I get smaller.

Thanks for any views.

[MaxFromage]

Do they do your payroll? 1/2 people?

Personal tax returns? Simple or multiple income streams?

[Cogcog]

MaxFromage said:

Do they do your payroll? 1/2 people?

Personal tax returns? Simple or multiple income streams?

I do payroll. I pay myself for our personal tax returns which are pretty simple.

[MaxFromage]

That is a bit pricey given you're up North as well. Although many accountants won't prepare limited company accounts for less than £1K+VAT these days.

You can find a good one man band who'll charge you £500 or a larger firm ripping you off for £2-3K.

If you're keeping good records, I'd be charging around £700-1000+VAT depending on a number of factors including your bookkeeping (2 partner, 20 staff practice). Although sometimes I don't think we charge enough for the service we provide compared to many out there.

There is a limit to how much you can drop the bill when a client 'semi-retires', given much of the work is compliance and filling in the boxes/keeping records to comply with professional standards. However I'd say 30%+ reduction is achievable in many circumstances.

If you've lost the personal touch from your current provider, then it could be the time to move, but just be aware you could end up in a mess for saving a few hundred. Make sure whoever you employ is recommended.

[Doofus]

Not that it's relevant, but how did you deregister for VAT with £140k turnover?

[Cogcog]

Doofus said:

Not that it's relevant, but how did you deregister for VAT with £140k turnover?

£140k has been previously, I started the slow down Christmas (2017), aiming to be below £85k by March 2019 then deregistered.

[Doofus]

Cogcog said:

Doofus said:

Not that it's relevant, but how did you deregister for VAT with £140k turnover?

£140k has been previously, I started the slow down Christmas (2017), aiming to be below £85k by March 2019 then deregistered.

'k, understood, thanks.

[Tebbers]

Have you looked at Crunch? Software and service combined. It’s approx £960 a year inc VAT so should save you a few pennies. I use them and they are good for simple accounts and especially if you do your own work like payroll.

[Cogcog]

Tebbers said:

Have you looked at Crunch? Software and service combined. It’s approx £960 a year inc VAT so should save you a few pennies. I use them and they are good for simple accounts and especially if you do your own work like payroll.

Thanks. I may hunt about for a local company by recommendation first. I have emailed by current company for an estimate of my costs for this year's accounts.

[Eric Mc]

The de-registration threshold is actually £85,000

I think you should not be paying more than £600 to £700 based on what you are describing.

[anonymous-user]

There are loads of self employed, semi-retired, chartered accountants around who have downsized and work from home. You are not getting extra value from using a larger firm IMO. Less reliable if anything. 700 quid i'd be aiming for.

[Cogcog]

Eric Mc said:

The de-registration threshold is actually £85,000

I think you should not be paying more than £600 to £700 based on what you are describing.

Yes that was my target, to get under £85k, and I am there now with 15 weeks to go until retirement.

I may have to re-register for VAT in 2021 due to another side of the business I was intending to close growing expectedly. so doing my monthy VAT may be an extra service I need. Last time I got a quote for doing my VAT it was over £1k.

[Eric Mc]

Sorry, slight brain fade. I meant to point out that the de-registration threshold is £83,000 (£2,000 lower than the registration threshold of £85,00). So you need to have a turnover consistently below £83,000 over a 12 month period in order to legally de-register.

Most business carry out their VAT returns every three months.

VAT has got more complicated in recent years due to the need to operate under the VAT Making Tax Digital system.

[MaxFromage]

sambucket said:

There are loads of self employed, semi-retired, chartered accountants around who have downsized and work from home. You are not getting extra value from using a larger firm IMO. Less reliable if anything. 700 quid i'd be aiming for.

Sweeping generalisations don't work in accountancy, it's down to individual firms. There are lots of poor accountants at all sizes.

Currently I'm getting new work from small one man band accountants because they've failed miserably during Covid and larger mid-size firms due to overpricing.

[2 GKC]

I’d say that’s expensive. 2 day’s work at the absolute most

[Cogcog]

Eric Mc said:

Sorry, slight brain fade. I meant to point out that the de-registration threshold is £83,000 (£2,000 lower than the registration threshold of £85,00). So you need to have a turnover consistently below £83,000 over a 12 month period in order to legally de-register.

Most business carry out their VAT returns every three months.

VAT has got more complicated in recent years due to the need to operate under the VAT Making Tax Digital system.

Yes MTD was the final straw.

[anonymous-user]

MaxFromage said:

sambucket said:

There are loads of self employed, semi-retired, chartered accountants around who have downsized and work from home. You are not getting extra value from using a larger firm IMO. Less reliable if anything. 700 quid i'd be aiming for.

Sweeping generalisations don't work in accountancy, it's down to individual firms. There are lots of poor accountants at all sizes.

Currently I'm getting new work from small one man band accountants because they've failed miserably during Covid and larger mid-size firms due to overpricing.

Please can I ask what you mean, by they've 'failed miserably'? It's unclear.

Sure, there are good and bad at all levels. But in my limited experience, if you do your homework, it's possible to get good reliable service from a one man band for less than the lower limit a firm charges. As OP has found, there is a lower limit.

[MaxFromage]

sambucket said:

Please can I ask what you mean, by they've 'failed miserably'? It's unclear.

Sure, there are good and bad at all levels. But in my limited experience, if you do your homework, it's possible to get good reliable service from a one man band for less than the lower limit a firm charges. As OP has found, there is a lower limit.

As you say, if you do your homework, you can get a (very) good service from a one man band. To suggest they are more reliable is only due to personal experience. This leads to explaining my point about some failing miserably.

I don't really like to pick on types of accountants as I have already noted. However the problem some businesses/individuals have had is their lone accountant being overwhelmed by the avalanche of questions and pleas for help during Covid. They haven't been able to cope or simply didn't want to, it was outside their comfort zone. More generally, I am finding more and more one man bands are sidelining their continuing professional development and doing their clients a disservice. Also failing to keep up with online developments. But as I say, this is only some, and not a generalisation, and of course I only really see those who are dissatisfied. But there are more of them than before.

I know of a few larger firms who furloughed staff and caused the same issues. So as I say, recommendations are key with any accountant.

Many small accountants (4-20 staff) are consolidating or selling, reducing experience and care levels and putting more junior staff on jobs. Medium size firms continue to provide poor levels of service and experience among SMEs.

Edited by MaxFromage on Sunday 16th August 11:10

[hyphen]

If you are doing your own VAT/no vat todo and doing your own Payroll, £1200+vat is too much. Unless you require, and are getting, superb service and advice.

[Patch1875]

I’m paying similar.(Edinburgh)

Just under the VAT threshold, Do my own payroll and a bookkeeper tidy’s it up before I give it to them to sort out corp tax.

Think they charge a fixed price based on turnover.

Edited by Patch1875 on Sunday 16th August 12:14