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Preparing co accounts myself

Preparing co accounts myself

I am a director of a company that I run with my husband. I'm a Chartered Accountant, but have always prepared P&L and Balance Sheet for the company and then sent the figures to the firm I trained with to be entered onto their accounts system and software and submitted to Companies House and HMRC. However, they charge £950 for this, and apart from calculating and providing for deferred tax, they don't change my figures at all.

I am now considering buying a copy of VT Accounts (or something similar) and doing it all myself. The only thing that I'm worried about is that it might spark some interest from HMRC. The firm in question has an exemplary record as far as tax investigations go, and so I would guess that HMRC see accounts/tax returns submitted by them as low risk. I'm not worried that we've done anything wrong, but I don't want to save a few hundred pounds now, only to be faced with the stress and cost of a tax investigation in the future.

Can anyone advise me whether this would set any alarm bells ringing with HMRC?
Anna Fitch

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21st Nov 2005 21:49

VT
Anna, you will find VT very user friendly unlike your Accountants.

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21st Nov 2005 16:52

Really?

I hesitate to ask what they have charged you for the tax returns on top of the ridiculous fee for the accounts.

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21st Nov 2005 10:55

If Mr Jenkins is right...

If Mr Jenkins is right in his supposition then there would be P11D issues.

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21st Nov 2005 12:54

Thanks Neil
I've had a look at the letter, and that's exactly what I was looking for - call me lazy!!

John and Phil - the firm has in the past prepared our personal tax returns, but they have invoiced us (personally) separately from the co accounts, and we pay from our personal bank accounts - so no issues there.

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22nd Nov 2005 12:34

shocking

At least Dick Turpin wore a mask.

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22nd Nov 2005 11:45

Ouch
That smarts

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By frauke
18th Nov 2005 16:38

Do it yourself?
Many, many years ago, I worked for a company who used one of the (then) big 4 auditors Arthur Anderson. The Company I worked for had a US quoted parent who insisted they did the audit. After the first year I was there, I realised there were a a few errors with the tax computation. I contacted the Inland Revenue direct, and they were extremely happy to go over the errors and change the returns. Ironically I was told it the auditors had done it instead the Revenue would not have been as helpful! I was able to reclaim over £15K for 2 years CT paid. The company agreed the following year onwards, I could do them instead (the audit still went ahead, but they did not do the the computations or charge a fee for it).

When AA ceased, I had to find new auditors. I was able to find a company, Parent approved of, for 30% of the old audit fee. They threw in the tax computations for free, so I let them do it.

By the way until 2 years ago, I was not a qualified accountant. As long as you are confident enough to stand by your figures, there is no reason you shouldn't do it yourself.

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18th Nov 2005 17:23

This time I'll answwer your question - No
HMRC do not care, they probably will not even notice.

The only reason to pay somone else is the burden of compliance, but depending where you are you shoud get a much lower quote by looking for a reputable small partnership or sole practitioner from the ICA website or yellow pages entry. I am ex PW, my boss is ex Peats, there are lots of us out their who know how to do it properly for a sensible price

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20th Nov 2005 09:10

Having established I can do the accounts myself...
...has anyone got a quick list of things that I should be asking my old firm to provide for me ie what would you ask a new client's old accountant to provide in the way of working papers? I will have a lot of the info myself, but I'll need their tax working papers so that I can see where we are with CAs etc. I don't want to forget anything now, only to have to go back to them in a couple of months with requests for info.

Thanks to all who have replied: you've put my mind at rest (and saved me £950)!

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By NeilW
20th Nov 2005 14:58

Check List
There is a good professional clearance letter here:

http://www.ir35calc.co.uk/how_to_change_your_accountant.aspx

I'm sure you can adapt it to your needs.

NeilW

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20th Nov 2005 19:40

mmmmmm
Anna, up until your last comment I would have said "go for it". However the fact that you are Chartered without professional office experience leads me to believe that perhaps you need some sort of advice. You don't say whether the company prepare you and your husbands' own Tax returns if they need to be prepared. This could make a vast difference, as they could be charging your company work they are doing for yourself, which means your company get the Tax relief where you wouldn't.

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By rquaye
18th Nov 2005 12:44

Go For It
Anna,

If you don't feel like dealing with the HMRC, then why don't you do everything as you intend and get another Qualified and Experienced person local to you to deal with the HMRC on behalf of your Co at a reasonable fee.

Reading through your query I can feel your loyalty to your old firm, but I think it is about time you fly the nest permanently.

Go for it and all the best with your decision.

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By MacSmat
18th Nov 2005 16:30

What about a commission arrangement....
If you are impressed with the quality of their business and tax advice then speak to your accountants about a commission deal for introducing work to them. They should be keen to be recommended by you to people you encounter and offer a deal for work you introduce to them.

If they don't impress you with the quality of their business and tax advice, then you should do the accounts and tax returns yourself as they are not giving you (and will not be able to give you in future) any value for their services.

Additionally their repututation on your accounts and tax returns will not be greatly enhancing the status of your business with lenders and HM Revenue & Customs.

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By Anonymous
18th Nov 2005 13:13

Preparing your own accounts...
Like you, I'm a CA involved in running our family business. I prepare and submit the accounts myself in Excel and get a firm to do a Companies Act checklist and review plus the full tax comp which costs c.£300 for accounts review and £300 for preparing and submitting the comp. (Maybe I could be paying less?) I don't think you really need an accounts preparation package for what you are proposing: Excel is fine.

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By Anonymous
17th Nov 2005 22:54

No
I really cant see that this alone would spark an Enquiry. I have certainly never heard of this type of scenario causing a problem.

If you really feel confident that you can do it I dont see why you dont.

Another option - see if another firm will do the job cheaper?

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By neileg
18th Nov 2005 09:08

Do you need VT accounts?
Unless your accounts are complex, surely Word or Excel would be perfectly fine for formatting your accounts.

Buying proprietory software might keep you up to date with changes in accounts legislation but I suspect it's an expensive way of doing this.

If you don't need an audit, then , as already suggested, I think you can shop around for the services you need and get a good reduction on the cost. I get the impression that you need the support on tax, so it might be worth thinking about a tax specialist. Companies House seem to be willing to accept accounts that only bear a passing resemblance to anything in the Companies Acts, anyway!

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22nd Nov 2005 07:45

From memory
it was £250 each. And before you say anything, yes, I'm going to do those myself as well now.

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18th Nov 2005 13:02

Shame on your employers..

I am always tapping up my former employers for free advice - they wouldn't dream of charging me for it.

I think charging you top whack is a little harsh.


Free Online Helpdesk from MMI, the Surrey Accountants.

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22nd Nov 2005 10:52

Wow..

£950 + £250 + £250..

I bet they'll be sorry to see you go!

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18th Nov 2005 09:57

DO what you are comfrotable with but..
you are being ripped off if we have the full story. We would be probably charging £300-£500 which covers putting it through a package we subscribe to, checking disclosure through a different package we subscribe to, checking the tax comp and proof reading.

DT is the easiest bit.

I would think you would do best to seek out a competent local chartered accountant who you get along with.

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18th Nov 2005 09:58

best plan is as follows
find a proactive firm who will charge you a little less (say a monkey up to about 800) but they will offer value for money in that
a) you know your accounts comply with the law
b) they will offer tax advice etc. that will save you at least the fee they are charging.

I don't think the fee is necessairly the issue here. It's the perception of lack of value for money.

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By NeilW
18th Nov 2005 09:24

No problem
There is no problem with filing accounts and tax returns for a company yourself. If you stay on the conservative side for tax deductible expenses then there is no value in investigating you anyway. Remember that you can give away up to £950 of claimable expenses and still be better off.

If you are worried about investigation then purchase investigation insurance. £300 should buy you Rolls Royce cover. I know of practices that are doing it for £50.

I'm sorry to have to say this, but currently you are being robbed. It's this sort of ridiculous charging when there is no value in the transaction that sticks in the throats of clients.

NeilW

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By Anonymous
18th Nov 2005 08:55

Do it!
HMRC probably won't even notice you've changed (well they don't look at anything else!) so give it a go. Failing that go for someone not so expensive - I'd be quoting half that and I'm sure there are plenty more who'd do the same. But really as you've got the training you might as well make the most of it.... Good luck!

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