Accountants!!!
Discussion
OK
How "clever" are accountants supposed to be, in terms of minimising liability for corporation tax (for example) ?
I have always believed that instead of things being black and white, there's a sliding scale with "crook" at one end and "squeaky clean" at the other, and with phrases such as "aggressive" somewhere in between.
What I'm saying is - we pay our accountants a bunch of money, and as far as I can see they don't do anything particularly "clever". There are things like prepayments and accruals which take a bit of time, and there's actually auditing the accounts (fair enough) but aside from the usual "take dividends rather than salary" there's nothing "clever" going on that would reduce the amount we have to pay in tax [to a bunch of money-grabbing incompetent corrupt bast**ds who line their own pockets whilst destroying the country.]
<deep breath>
I suppose if you're making a few million in profit, there are more options open - but if your limited company is making say £100K - 200K per year profit before tax - is there going to be much difference between one accountant and another in terms of cleverness (= reducing CT liability) ? That's assuming that both are nearer the "squeaky clean" end than the "dodgy" end, of course.
I'm just frustrated that ours don't appear to be even covering their own fees in terms of saved tax, which surely is the minimum one might expect?? I would rate them as "definitely very squeaky clean" which is the safe option - but I can't help wishing they were a little more adventurous...
How "clever" are accountants supposed to be, in terms of minimising liability for corporation tax (for example) ?
I have always believed that instead of things being black and white, there's a sliding scale with "crook" at one end and "squeaky clean" at the other, and with phrases such as "aggressive" somewhere in between.
What I'm saying is - we pay our accountants a bunch of money, and as far as I can see they don't do anything particularly "clever". There are things like prepayments and accruals which take a bit of time, and there's actually auditing the accounts (fair enough) but aside from the usual "take dividends rather than salary" there's nothing "clever" going on that would reduce the amount we have to pay in tax [to a bunch of money-grabbing incompetent corrupt bast**ds who line their own pockets whilst destroying the country.]
<deep breath>
I suppose if you're making a few million in profit, there are more options open - but if your limited company is making say £100K - 200K per year profit before tax - is there going to be much difference between one accountant and another in terms of cleverness (= reducing CT liability) ? That's assuming that both are nearer the "squeaky clean" end than the "dodgy" end, of course.
I'm just frustrated that ours don't appear to be even covering their own fees in terms of saved tax, which surely is the minimum one might expect?? I would rate them as "definitely very squeaky clean" which is the safe option - but I can't help wishing they were a little more adventurous...
zadumbreion said:
I have always believed that instead of things being black and white, there's a sliding scale with "crook" at one end and "squeaky clean" at the other, and with phrases such as "aggressive" somewhere in between.
Or to use standard terminology Tax Avoidance is legal Tax evasion is not.Most accountants Ive found to be useless, essentially it depends on how much they 'care' about saving you money. Many don't and just do the standard limit expenses by numbers- if you take the time to read HMRC papers then chances are you will spot a things that you would be entitled to.
My last accountant came with a reccomendation but was fired for being incompetent, amongst other things he wasn't good at were actually doing the accounts- got a letter saying they had been rejected for incorrect dates for f's sakes
Edited by amir_j on Monday 29th September 16:54
It's very frustrating when many people brag about "putting things through the company", but I wonder how true this is?
I know someone who would have you believe that he charges virtually everything he spends to his company, but maybe there's an accountant behind him rolling his eyes and sending off tax payments to HMRC?
I know someone who would have you believe that he charges virtually everything he spends to his company, but maybe there's an accountant behind him rolling his eyes and sending off tax payments to HMRC?
Edited by Deva Link on Monday 29th September 17:49
It's an interesting question and one I've pondered. I'm in two minds whether to 'let my accountant go' in fact.
My company is quite small (just me!) and as it's service based, i.e. doesn't manufacture anything or resell anything, has very simple accounts.
My year ended on 31 August and, after 'everything else', there was about £15k in cash with 'nothing to do', sitting in the bank. I read in this weekend's paper, that small companies with director shareholders should put 'spare' cash into pensions to 'avoid' tax. Too late now.
In retrospect, I would have expected my accountant to have called me in at the end of month 11 to have a quick 'health check' on the company's finances and make whatever plans/provisions to maximise income and minimise tax.
Or am I expecting too much?
My company is quite small (just me!) and as it's service based, i.e. doesn't manufacture anything or resell anything, has very simple accounts.
My year ended on 31 August and, after 'everything else', there was about £15k in cash with 'nothing to do', sitting in the bank. I read in this weekend's paper, that small companies with director shareholders should put 'spare' cash into pensions to 'avoid' tax. Too late now.
In retrospect, I would have expected my accountant to have called me in at the end of month 11 to have a quick 'health check' on the company's finances and make whatever plans/provisions to maximise income and minimise tax.
Or am I expecting too much?
No, you are not. However, I find with my case that I tend to do most for the clients who express an interest in their financial affairs and ask me lots of questions - and are, of course, willing to pay me for my time.
Accountants are only human too (difficult to believe, I know) and they tend to interact more with those clients who speak to them more often and pay their fees
.
On the whole, we have to gauge the nature of the people we deal with. Some are hungry for information, others treat their accountant like their dentist -and just about tolerate having to contact him once a year. I have been complained to by clients who told me "Why did you give me information I didn't ask for? I hope I'm not paying for it".
Sop, the trick is, assess your clients' individual needs and tailor your service to suit them.
Accountants are only human too (difficult to believe, I know) and they tend to interact more with those clients who speak to them more often and pay their fees
.On the whole, we have to gauge the nature of the people we deal with. Some are hungry for information, others treat their accountant like their dentist -and just about tolerate having to contact him once a year. I have been complained to by clients who told me "Why did you give me information I didn't ask for? I hope I'm not paying for it".
Sop, the trick is, assess your clients' individual needs and tailor your service to suit them.
V8mate said:
It's an interesting question and one I've pondered. I'm in two minds whether to 'let my accountant go' in fact.
My company is quite small (just me!) and as it's service based, i.e. doesn't manufacture anything or resell anything, has very simple accounts.
My year ended on 31 August and, after 'everything else', there was about £15k in cash with 'nothing to do', sitting in the bank. I read in this weekend's paper, that small companies with director shareholders should put 'spare' cash into pensions to 'avoid' tax. Too late now.
In retrospect, I would have expected my accountant to have called me in at the end of month 11 to have a quick 'health check' on the company's finances and make whatever plans/provisions to maximise income and minimise tax.
Or am I expecting too much?
Perhaps different rules apply to your accounts than to ours as we're a ltd company, but my understanding is that there's no need for an end of year panic. One thing an accountant can do is is to "finesse" the figures to suit the company's needs. Having £15K in the bank doesn't mean there's £15K profit. I also thought that with pension payments, you could pay retrospectively, and get the tax back?My company is quite small (just me!) and as it's service based, i.e. doesn't manufacture anything or resell anything, has very simple accounts.
My year ended on 31 August and, after 'everything else', there was about £15k in cash with 'nothing to do', sitting in the bank. I read in this weekend's paper, that small companies with director shareholders should put 'spare' cash into pensions to 'avoid' tax. Too late now.
In retrospect, I would have expected my accountant to have called me in at the end of month 11 to have a quick 'health check' on the company's finances and make whatever plans/provisions to maximise income and minimise tax.
Or am I expecting too much?
Eric Mc said:
No, you are not. However, I find with my case that I tend to do most for the clients who express an interest in their financial affairs and ask me lots of questions - and are, of course, willing to pay me for my time.
Accountants are only human too (difficult to believe, I know) and they tend to interact more with those clients who speak to them more often and pay their fees.
On the whole, we have to gauge the nature of the people we deal with. Some are hungry for information, others treat their accountant like their dentist -and just about tolerate having to contact him once a year. I have been complained to by clients who told me "Why did you give me information I didn't ask for? I hope I'm not paying for it".
Sop, the trick is, assess your clients' individual needs and tailor your service to suit them.
Eric- Are you taking on clients? if so please can you email me details of how much you charge etc for a one man IT contractor company. Accountants are only human too (difficult to believe, I know) and they tend to interact more with those clients who speak to them more often and pay their fees
.On the whole, we have to gauge the nature of the people we deal with. Some are hungry for information, others treat their accountant like their dentist -and just about tolerate having to contact him once a year. I have been complained to by clients who told me "Why did you give me information I didn't ask for? I hope I'm not paying for it".
Sop, the trick is, assess your clients' individual needs and tailor your service to suit them.
Was contracting in the UK with an all inclusive monthly fee contractor accountant but went abroad so closed the company down. Coming back in a few months.
Edited by amir_j on Monday 29th September 18:10
Deva Link said:
V8mate said:
It's an interesting question and one I've pondered. I'm in two minds whether to 'let my accountant go' in fact.
My company is quite small (just me!) and as it's service based, i.e. doesn't manufacture anything or resell anything, has very simple accounts.
My year ended on 31 August and, after 'everything else', there was about £15k in cash with 'nothing to do', sitting in the bank. I read in this weekend's paper, that small companies with director shareholders should put 'spare' cash into pensions to 'avoid' tax. Too late now.
In retrospect, I would have expected my accountant to have called me in at the end of month 11 to have a quick 'health check' on the company's finances and make whatever plans/provisions to maximise income and minimise tax.
Or am I expecting too much?
Perhaps different rules apply to your accounts than to ours as we're a ltd company, but my understanding is that there's no need for an end of year panic. One thing an accountant can do is is to "finesse" the figures to suit the company's needs. Having £15K in the bank doesn't mean there's £15K profit. I also thought that with pension payments, you could pay retrospectively, and get the tax back?My company is quite small (just me!) and as it's service based, i.e. doesn't manufacture anything or resell anything, has very simple accounts.
My year ended on 31 August and, after 'everything else', there was about £15k in cash with 'nothing to do', sitting in the bank. I read in this weekend's paper, that small companies with director shareholders should put 'spare' cash into pensions to 'avoid' tax. Too late now.
In retrospect, I would have expected my accountant to have called me in at the end of month 11 to have a quick 'health check' on the company's finances and make whatever plans/provisions to maximise income and minimise tax.
Or am I expecting too much?
I do take on board your commens, Eric, and they are very fair. I wouldn't say I have been in constant contact with the practice, but I do always opt to deliver my own paperwork each quarter in order to pop in and say 'hi' rather than have their office 'bod' collect them etc. Also, my first full year of trading, so maybe a little more 'hand-holding' would have been appropriate?
So how much might one expect to pay an accountant for preparation of annual accounts for a limited company, around £1M turnover, 9 employees, decent books kept using Quickbooks (about the only thing we don't do is the prepayments / accruals / depreciation stuff)?
Oh, and how I love the £100 charges every time I have a 10-minute phone conversation with them....
ETA: they are not audited, and I think there's a small business exemption or something.
Oh, and how I love the £100 charges every time I have a 10-minute phone conversation with them....
ETA: they are not audited, and I think there's a small business exemption or something.
Edited by zadumbreion on Wednesday 1st October 15:35
zadumbreion said:
So how much might one expect to pay an accountant for preparation of annual accounts for a limited company, around £1M turnover, 9 employees, decent books kept using Quickbooks (about the only thing we don't do is the prepayments / accruals / depreciation stuff)?
Oh, and how I love the £100 charges every time I have a 10-minute phone conversation with them....
ETA: they are not audited, and I think there's a small business exemption or something.
We're a similar size and on our 3rd firm in 10 years. None of them have ever charged me for phone calls like that! I pay £3-4kpa which will include a monthly chat or visit if necessary. Any extra actual work (like cashflow forecasts etc) costs £150/hr.Oh, and how I love the £100 charges every time I have a 10-minute phone conversation with them....
ETA: they are not audited, and I think there's a small business exemption or something.
Edited by zadumbreion on Wednesday 1st October 15:35
What is much more important than the fee is the credentials of the firm and actual accountant. Go by recommendation. For example, my previous accountant (a national franchise chain) got our business with some fancy dividend scheme. Which failed. And cost me £250,000 which I am in the middle of paying back to HMRC. Turns out the franchisee wasn't even an accountant!
Edited by richardxjr on Wednesday 1st October 17:43
I pay my accountant an annual fee ( about £1k) in quartely installments. I do the CH stuff, the payroll and VAT for 2 people and a turnover of about £150K. For the £1k he does our accounts (slowly), answers the odd stupid email question from me , has a couple of more extended (20 min) calls during the year and an annnual face-to-face hour or so between draft and final accounts. He sends in my CT return and quietly does my own tax return. He points out tax schemes I should take advantage of, tells me off when I get close to the line and seems to have a genuine interest in what I do and where the business is going.
richardxjr said:
zadumbreion said:
So how much might one expect to pay an accountant for preparation of annual accounts for a limited company, around £1M turnover, 9 employees, decent books kept using Quickbooks (about the only thing we don't do is the prepayments / accruals / depreciation stuff)?
Oh, and how I love the £100 charges every time I have a 10-minute phone conversation with them....
ETA: they are not audited, and I think there's a small business exemption or something.
We're a similar size and on our 3rd firm in 10 years. None of them have ever charged me for phone calls like that! I pay £3-4kpa which will include a monthly chat or visit if necessary. Any extra actual work (like cashflow forecasts etc) costs £150/hr.Oh, and how I love the £100 charges every time I have a 10-minute phone conversation with them....
ETA: they are not audited, and I think there's a small business exemption or something.
Edited by zadumbreion on Wednesday 1st October 15:35
What is much more important than the fee is the credentials of the firm and actual accountant. Go by recommendation. For example, my previous accountant (a national franchise chain) got our business with some fancy dividend scheme. Which failed. And cost me £250,000 which I am in the middle of paying back to HMRC. Turns out the franchisee wasn't even an accountant!
Edited by richardxjr on Wednesday 1st October 17:43
smartie said:
richardxjr said:
zadumbreion said:
So how much might one expect to pay an accountant for preparation of annual accounts for a limited company, around £1M turnover, 9 employees, decent books kept using Quickbooks (about the only thing we don't do is the prepayments / accruals / depreciation stuff)?
Oh, and how I love the £100 charges every time I have a 10-minute phone conversation with them....
ETA: they are not audited, and I think there's a small business exemption or something.
We're a similar size and on our 3rd firm in 10 years. None of them have ever charged me for phone calls like that! I pay £3-4kpa which will include a monthly chat or visit if necessary. Any extra actual work (like cashflow forecasts etc) costs £150/hr.Oh, and how I love the £100 charges every time I have a 10-minute phone conversation with them....
ETA: they are not audited, and I think there's a small business exemption or something.
Edited by zadumbreion on Wednesday 1st October 15:35
What is much more important than the fee is the credentials of the firm and actual accountant. Go by recommendation. For example, my previous accountant (a national franchise chain) got our business with some fancy dividend scheme. Which failed. And cost me £250,000 which I am in the middle of paying back to HMRC. Turns out the franchisee wasn't even an accountant!
Edited by richardxjr on Wednesday 1st October 17:43
richardxjr said:
smartie said:
richardxjr said:
zadumbreion said:
So how much might one expect to pay an accountant for preparation of annual accounts for a limited company, around £1M turnover, 9 employees, decent books kept using Quickbooks (about the only thing we don't do is the prepayments / accruals / depreciation stuff)?
Oh, and how I love the £100 charges every time I have a 10-minute phone conversation with them....
ETA: they are not audited, and I think there's a small business exemption or something.
We're a similar size and on our 3rd firm in 10 years. None of them have ever charged me for phone calls like that! I pay £3-4kpa which will include a monthly chat or visit if necessary. Any extra actual work (like cashflow forecasts etc) costs £150/hr.Oh, and how I love the £100 charges every time I have a 10-minute phone conversation with them....
ETA: they are not audited, and I think there's a small business exemption or something.
Edited by zadumbreion on Wednesday 1st October 15:35
What is much more important than the fee is the credentials of the firm and actual accountant. Go by recommendation. For example, my previous accountant (a national franchise chain) got our business with some fancy dividend scheme. Which failed. And cost me £250,000 which I am in the middle of paying back to HMRC. Turns out the franchisee wasn't even an accountant!
Edited by richardxjr on Wednesday 1st October 17:43
Well, I know for a fact that they (and their clients) are getting crawled all over from HMRC and their Indemnity insurance is about to get a hammering.
Within our settlement we had a penalty of just 5% reflecting how much (little) blame was apportioned to us vs. the so-called accountant.
It was such a stupid scheme that even if they had actually set it up correctly it could never have worked.
ETA That sum I mentioned above didn't include the further £25k spent on a top 5 corporate firm I had to engage to sort the mess out.
Within our settlement we had a penalty of just 5% reflecting how much (little) blame was apportioned to us vs. the so-called accountant.
It was such a stupid scheme that even if they had actually set it up correctly it could never have worked.
ETA That sum I mentioned above didn't include the further £25k spent on a top 5 corporate firm I had to engage to sort the mess out.
Edited by richardxjr on Thursday 2nd October 10:08
I know some excellent unqulaified accountants and some shockingly bad qualified ones - so it is not always guranteed that "qualified" equates to "quality".
What "qualified" does eqaute to is "comeback". A non-qualified practising accountant may not have any form of practising certificate and therefore may not carry any professional indemnity insurance. That could leave the client in a very exposed situation if and when things go bad.
What "qualified" does eqaute to is "comeback". A non-qualified practising accountant may not have any form of practising certificate and therefore may not carry any professional indemnity insurance. That could leave the client in a very exposed situation if and when things go bad.
smartie said:
richardxjr said:
smartie said:
richardxjr said:
zadumbreion said:
So how much might one expect to pay an accountant for preparation of annual accounts for a limited company, around £1M turnover, 9 employees, decent books kept using Quickbooks (about the only thing we don't do is the prepayments / accruals / depreciation stuff)?
Oh, and how I love the £100 charges every time I have a 10-minute phone conversation with them....
ETA: they are not audited, and I think there's a small business exemption or something.
We're a similar size and on our 3rd firm in 10 years. None of them have ever charged me for phone calls like that! I pay £3-4kpa which will include a monthly chat or visit if necessary. Any extra actual work (like cashflow forecasts etc) costs £150/hr.Oh, and how I love the £100 charges every time I have a 10-minute phone conversation with them....
ETA: they are not audited, and I think there's a small business exemption or something.
Edited by zadumbreion on Wednesday 1st October 15:35
What is much more important than the fee is the credentials of the firm and actual accountant. Go by recommendation. For example, my previous accountant (a national franchise chain) got our business with some fancy dividend scheme. Which failed. And cost me £250,000 which I am in the middle of paying back to HMRC. Turns out the franchisee wasn't even an accountant!
Edited by richardxjr on Wednesday 1st October 17:43
There is one near me and my wife used them to sort out a tax problem from a few years ago. Turns out that even though she nominated the guy to deal with HMRC he did feck all with all the paperwork we gave him. After 6 months, it turns out that the money that we gave him to pay the HMRC, didn't go to the HMRC and they were now getting stroppy and wanting there tax money. We had to go to another accountant to sort out TA s
t and then sort out the HMRC. Long story short, don't use TA. Gassing Station | Business | Top of Page | What's New | My Stuff