Big 4 Ripoffs merchants

Big 4 Ripoffs merchants

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We've recently taken over a client - a proverbial Little Old Lady, the widowed mother of one of our existing clients. She has pensions, a handful of share divs and bank interest, some of which is admittedly in Jersey. Total income - barely at the taxable threshold.

Formerly dealt with by a big 4 firm. Laughably easy Return to prepare, no tax to pay, tiny rebate of interest and div tax credits.

We're cowboys but in this instance, our Little Old Lady needs nothing more (apart from giving her some advice about pensioner tax credit, that the Big 4 firm never told her about). I'm guessing we'll struggle to bill her £150-£200.

We get her as a new client because she's had a letter from her Big 4 saying their charges are increasing from last year's fee of £1,400 + VAT to £2,000 + VAT. This has finally cracked the loyalty to the firm (her husband used to use them whilst still alive).

I'm appalled and offended that an elderly lady can be ripped off and treated like this. I guess they just want rid of her, but if so, couldn't they just have treated her with some respect and explained their overheads were ridiculously high so she'd be best advised to get a smaller firm to deal with the Return.

I've seen similar before from Big Firms, but this takes the biscuit (and the cake and the entire jar of cookies) - unless anyone's seen anything greedier or more offensive?

Marion Morrison

Replies (18)

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By AnonymousUser
04th Aug 2008 11:33

Big 4 ripoff merchants
Ronald - 6" sh*g pile carpets? I'm gutted to hear from your experience that some of the Big 4 are kitted out in such luxury! I am standing on cheap and nasty tile carpets in my office.

...I need to start charging more obviously.

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By rhangus.
01st Aug 2008 23:49

Not if they so wish, but if they are shown properly with due care and attention that it is clearly wasted money paying the hugely premium prices at these ridiculously pompous places with their american style 6" sh*g pile carpets £1000 per square millometer.

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By User deleted
30th Jul 2008 13:50

Horses for courses
After reading through the thread.

The level of accountancy/taxation advice required is dependant on the complexity.

I suppose the analogy would be for obtaining a service/repairs on your old banger at a Rolls Royce franchise, and paying through the nose, or getting the service/repairs at a back street garage and paying a lesser price. Both will provide the same service and quality.

Are you suggesting the Rolls Royce franchise should reduce their price to match the back street garage just because your banger isn't on a par with a premium car ?

It is all about identifying your target customer. If they choose to shop at Harrods intead of Netto, then you cannot complain about the level of their bill. It is after all personal choice! We are not in a communist state! The previous accountants have set their fee, and the customer can shop around for a lower price elsewhere, if they so wish.

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By Dave Paveley
28th Jul 2008 21:29

Bring out the boxing gloves..

I feel a new debate coming on..

Big firm vs small firm.

This could be the new qualifieds vs unqualifieds debate.

;)

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By AnonymousUser
28th Jul 2008 15:44

Big 4 Ripoffs merchants
Working for one of the big 4 myself, I can say that for the case highlighted we would probably charge closer to what the original poster said, but another member of the big 4 or another department in the same big 4 firm may decide to charge more.
It's a bit like some of the shockers we see when sorting out messes made by smaller firms. You get some good and some bad -- the same as you get from staff within the big 4.

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By User deleted
28th Jul 2008 15:30

What does the big 4 engagement letter say?
Maybe I am being naive but what is it in the big 4 letter of engagement that allows them to charge such enormous fees? Our engagement letter says fees will be charged to 'take account of the degree of responsibility and skill involved and the time necessarily occupied on work carried out.' How can they justify that bill in respect of work 'necessarily' completed?

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By AnonymousUser
28th Jul 2008 13:35

It really annoys me ...
I know it is none of my business what other people charge but I feel the same way about accountants doing it as I do rogue roofers / brickies. If this big 4 firm were a one of the latter and had charged a pensioner £2350.00 for something that she could get done quite adequately elsewhere for £150.00 then we would have had hidden cameras and Watch Dog all over it in a flash!

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By gbuckell
28th Jul 2008 12:11

Only a factor of 10 or so
In this case the big 4 fee was only some 10 times the small firm's fee. I was asked once to prepare some share scheme rules for a UK subsidiary of a US company. The firm that asked me was a small firm of accountants who acted as auditors to the UK company. I was essentially copying the US company rules but amending them slightly to make them more friendly to the UK tax system. I charged £750. Okay I hear you cry - I should have charged much higher on value billing principles! But the tax savings were not great as only one UK employee was involved. I found out later that the US company approached their US auditors (big 4) for a quote to do the same. Thye contacted the London office. No problem was the response - we will charge £40,000!!!! Later they were told that someone else had done the job and what would they charge to review it. This time it was a mere £10,000.

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By User deleted
25th Jul 2008 06:54

I used to work for a big 4 firm
Some of the people who work there are very good. Quite a lot are mediocre at best and, working in the ct department, I often used to spot errors in the accounts for which we were preparing ct returns.

It finished me off when they added 5% on top of the charge out rates to cover admin. I thought that was supposed to be part of the charge out rate!, but whatever your rate was on paper, it was actually 5% more in reality.

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By AnonymousUser
24th Jul 2008 23:29

Big 4 aren't good at personal tax return work
".....told her to stay with us and we'd do a good job. "

I have never come across a good job done by a big 4 firm on straightforward personal tax work. They should stick to what they are good at and send inappropriate cases elsewhere.

I have had to do numerous "error or mistake" claims to correct basic errors made in previous tax returns prepared by these firms. They use inexperienced staff who just process what they are sent without asking what to me seem obvious questions eg why were there only 3 BP dividends in the year?

Many of my existing clients have given up on the free tax service provided by their employers through the big 4 because the staff change each year, ask the same questions as the last year and make the same mistakes. Most clients prefer continuity and an accountant who is experienced and familiar with their circumstances, not a production-line service with no brain.

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By MarionMorrison
24th Jul 2008 23:14

Oops
Div Tax Credit rebates? Methinks I'm showing my age or typing too quickly.

...and yes, if I can persuade the Revenue to stop sending her Returns (not always as easy as it ought to be), I'll have her out of the system pronto.

I'm entirely familiar with the whole concept of overcharging as a means of weeding out clients that you don't want to deal with but surely £2K is completely unjustifiable. You say that she's gaining peace of mind out of the ongoing relationship because her husband always used them. but shouldn't a client/accountant relationship work both ways. Don't the accountants owe her a debt of honesty to tell her she's wasting her money if theres's been a long-standing relationship with her husband? No-one's said anything about her being able to get a better deal elsewhere - they just keep jacking up the fees each year.

And how in time terms is £2K justifiable? I know I'm out of touch, but in terms of preparing the Return, there's little more than half an hour, tops. Of course there's a little more to it. Is it likely to have been going through an unnecessary rigmarole of manager review (£500/hour) and partner review (£1,000/hour) or something similar?

If so, it's understandable that people at such an elevated level wouldn't have heard about Pensioner Tax Credits. Mind you, I bet they wouldn't have been reclaiming the Div/TC's!

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By User deleted
24th Jul 2008 16:38

Yours is an eminently reasonable fee, but....
.... rebates of tax credits on divi's?

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By fellowcraft
24th Jul 2008 15:50

It's not exactly the most prolific conspiracy ever heard
Well Little Old Mrs Duck from Froggington with £28.50 of annual income shouldn't be using a multinational conglomerate firm to prepare her tax return should she?

I actually think thats quite cheap for Big Four!

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By AnonymousUser
24th Jul 2008 12:51

Greedier and more offensive?
That really does sound disgustingly expensive. I'm glad she's found someone who will charge her something more reasonable and realistic.

I took on a new sole trader client 3 years ago, who I bill a very reasonable £350 per annum. I nearly fell off my chair when I received the working papers back from the previous accountant. £3500 per annum!
To be fair, the working papers they provided were about an inch thick, so they'd clearly done some work for their money, but for a straightforward sole trader a lot of their schedules just weren't necessary, and I was very angry at the time with the injustice of it.

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By User deleted
24th Jul 2008 12:31

Wow
That is amazing.

Swiss - you are joking arent you??!

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By User deleted
24th Jul 2008 12:12

Another reason
why pensioners should have their Return assessed by the Revenue who already have the necessary information.

http://www.taxvol.org.uk/index.htm


If her income is that low, these Returns ought to be done on a voluntary basis.

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By skylarking
24th Jul 2008 12:09

Someone's got to pay for the Ferraris
Have a similar one from k**g. Director with employment income, dividends and bank interest: £900+vat.

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By User deleted
24th Jul 2008 11:59

To be honest
if the return is that easy i think your £150 is a bit steep!

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