Cost of online filing (PAYE)

Cost of online filing (PAYE)

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accounts / agents costs

my accountant wants to charge me £150 this year, £100 next and £50 in the third year to cover their increased IT and admin costs assoicated with filing online.

is it acceptable that they are effectivly taking 75% of the incentive this year as an admin fee and 50% over the five years

does anyone else charge online filing as an extra?
joe smithers

Replies (17)

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David Ross
By davidross
10th May 2005 01:28

Fees are tax deductible - the bonus is not
We are charging £100 this year. less in later years. This will cost a typical company £81 after CT but the tax free bonus bonus is equivalent to £308 taxable income - our clients get the equivalent of a £227 invoice for our work.
We are working late into the night to file the Returns and get past the blockage which occurrs in the daytime, so I belive we are value for mony.
On a separate note, we are also a software company and are spending good money on the expertise to upgrade our products to FBI. look at a page of XML and you will see what a special sort of brain you need for this
Visit us at www.fairbalance.co.uk

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By User deleted
09th May 2005 19:01

The real cost?
Just a thought Peter - you spent 1/2 odd dealing with your online filing. How much of your chargeable time did you actually loose doing it? It can just sometimes be a little short-sighted to undertake work yourself and use up chargeable time when you could pay a professional to do it, and be assured its be done properly.

The problem with any charge is that a client rarely undertands or appreciates the actual work involved. If only tax work was a simple as inputing figures on a website.....then I truly would be a rich accountant!!

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By AnonymousUser
10th May 2005 06:45

Re some of the replies
Peter Schofield:
If I were to engage a plumber, I would most definitely expect the amount that I pay him to contribute to the cost, maintenance and ultimate replacement of his tools of the trade, as well as to any of his other business overheads. How else is he to be expected to fund them otherwise than by levying a charge on his customers? The only difference is the absence of an itemisation of overhead recovery in the invoice, but that is a far cry from saying that you are not paying for it. Indeed greater itemisation = greater transparency of charges and should be embraced.

Were I a client of an accountant who did NOT want him to file online on my behalf (ie because I wanted to do it myself to save the accountancy charge) I would object to the thought that the other charges that he was levying on me included an overhead recovery for a service that I was not taking. So I would prefer to go to an accountant whose pricing structure was targeted to those who availed themselves of the service, recovered the associated costs from those customers, and left me better off as a result.

Frauke Golding:
Good point. Our charges for filing on-line are not in addition to the charges that formerly levied for filing manually, which were undoubtedly higher, so our clients are saving overall. I suspect that most non-accountants reading this thread are assuming that they are incurring a double-charge, but I am not aware of any evidence of that in the thread (or elsewhere).

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By schofip
09th May 2005 14:13

Solution for the One man Bands
I am a one man Ltd company (IT consultant) My accountant wanted to charge me a one off fee of £100 plus VAT for online filing (which I cannot recover as I am on the flat rate VAT scheme). I already pay the accountant to prepare the P14 and P35 forms.

I declined his offer and elected to file online myself. I applied to the revenue myself for my online account username and password (10 mins).

The setup time for one employee took 10 Mins and 15 mins to transfer the half dosen figures from the P14 and P35 into the revenues online forms. The columns and questions map one to one with the existing paper forms.

If I employed a plumber to do a job on my house. I would not expect him to ask me to contribute to the purchase of a bigger spanner. I would consider this to be the tools for the trade. Just as I would not ask one of my clients to fund the purchase of my laptop or broadband link.
My advice is unless you have a lot of employees do it yourself and let the accountant fund his own technology upgrade.

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By frauke
09th May 2005 14:48

Extra Filing Charges?
This is difficult - however I know I have had no extra costs for filing online - I actualy found my costs have dropped, and so filing on line is more profitable for me as I have charged the same fees as before!

I could understand if there had been extra costs involved, but surely the Accountant already had the Braodband & Computer etc in place. (Have they not been filing tax returns on line?)It is far quicker to file online and there are no postage costs.

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By F Habib
09th May 2005 13:29

Good Deal!
My payroll bureau is charging me £99+VAT for all five years! Having read the other comments, it seems that the bureau is highly competent, efficient and competitive.

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By User deleted
06th May 2005 21:02

Additional charge
Where we provide a charged for payroll service, we are charging £50 per company + £5 for each employee filed electronically in addition to our normal charges. We are reaising the invoice after we obtain the correlation report confirming successful submission.. Where we don't prepare the payroll, we are making a time-based charge for any work we need to do on the P35 and P14s + the online filing fee. We are charging the same each year and not linking it to the incentive in the hope that the client gets used to the additional charge and inertia allows him to continue to pay without complaint after the online filing incentive finishes

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By User deleted
06th May 2005 21:32

YES!
Surprisingly Joe accountants dont operate as charities - we do like to make money! A concept some individuals seem not to grasp at times.

I think your accountants are offering a fair price. As a previous reply, if you dont want to pay do it yourself.

Personally I'd rather pay a professional to have it done properly and get on making money yourself.

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By User deleted
07th May 2005 21:01

in reply
i am a self employeed engineer who takes the allowence / maximum dividened route to pay the least amount of tax (after all who likes paying tax) I use a 'specialist' firm who only deal with companies like myself and currently pay £1950 a year in fees, whilst this may seem alot, in includes accountax advice, contract review etc. etc. to make sure that i trade outside IR35. They currently represent 800 companies like myself and it seems to me that a collective charge of £120,000 this year and £240,00 over three years to be excessive.

I have decided that as i pay them a fee weekly, based on the invoice they process, i have already paid for them to manually submit the data this year and would rather loose the paltry £50 i wouild recieve rather than give them £150 to upgrade theiir assets at my expense.

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By John Savage
08th May 2005 18:58

Teach yourself the skills.
You state you "would rather loose the paltry £50 .... rather than give them £150 to upgrade their assets at my expense". OK, there is an element of argument in what you say. However, two points to put forward.

One is that you would lose £100, not £50, as the filing incentive is £250, and tax free. And if that is paltry, then it sounds as if your own clients face quite sizeable invoices for your services.

Secondly, and of more importance, you seem to begrudge the fact that your accountant is charging for upgrading assets. Well, to look at it in reverse, if I were to engage the services of an engineer, I would hope that he/she had the latest specialised engineering software to work on my case. In addition, I would also hope that he/she had the latest skills and knowledge of up to date procedures in the field. Those "assets" have to be paid for, the cost being not only the costs to purchase up to date software or attend CPD courses or pay for current information, but also the costs of lost chargeable time in having to keep skills updated.

But at the end of the day, if you don't want to pay for them, then don't. Submit the PAYE return yourself. No worries. Teach yourself the latest problems and complexities that Brown and his cronies throws small businesses such as your own, in order that you can protect yourself and your business and keep your tax bill down. Learn how to draw up an IR35 proof contact and protect yourself against the myriad of other problems which this incumbent government has created for us.

There is no need for me to employ any engineer, I could teach myself the necessary engineering skills, it is a simple as that.

Finally, I have to also add here that if I ever get the impression that any of my clients are unhappy with what I charge them, they are free to leave at any time and seek out another accountant to represent them. I apologise if that sounds arrogant to a non-accountant, but I would feel fairly sure that, were the roles reversed, you would have the same attitude if I were to snipe and nit pick with you over your bill you gave me for your sepcialised services.

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By User deleted
09th May 2005 09:03

Money for nothing
That's what you're getting if your accountant files online and doesn't charge you a full £250 in the first year. Be it £50, £100 or even just 10p, it's more than you had before. If you don't think it's much give it to charity and I doubt they'd hand it back and say "sorry but it's too little for us to accept".

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By JSJ54
06th May 2005 17:01

It's a Free Country
If you don't like it do it yourself.

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By AnonymousUser
06th May 2005 19:35

On the other hand ...
it is worth examining just how much extra cost is really involved. Additional computing costs only arise through out of date systems, not because of PAYE online filing. I agree with others commenting below that there is some extra set-up time involved - but having gone through the process myself I can not agree with the figures you are being quoted.

A further thought. I wonder if your accountant would make the same additional charge to a large firm (they do not receive a financial incentive)?

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By adam.arca
06th May 2005 13:17

Extra work = extra fees
Yes, in my (probably biased) opinion, it's entirely acceptable for your accountant to charge for the extra work involved.

Payroll end of year used to be straightforward. We completed the forms, sent them to the client and told him to file by 19/5.

This year, we've had to prat around getting FBI2 forms signed, chased the slowcoaches, submitted to the Rev, chased the Rev where we still don't appear as agent. And that's just for starters.

We've now got to complete the forms and send them to the client to sign as before. But we've now also got to ask for them back, chase the slowcoaches again, spend time submitting on-line (and, yes, this does take a lot more than 5 mins), negotiate with the government gateway and file about twice as much paper as we used to. Oh, and we've also got to pay increased software costs to our own supplier.

On top of that, we're getting ear ache from clients worried about their incentive payments.

Hope that puts you in the picture! You mustn't forget that when any government department boasts about making things simpler by doing it online, they're only talking about making it simpler for themselves! All the costs and time are pushed down on the taxpayer and their agent, and it's only fair the agent is compensated if he's asked to undertake all this mucking about.

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By John Savage
06th May 2005 16:27

Lucky.
Joe, suggest you are a lucky man, I'm charging my clients 50% of the tax free incentive, which they have all agreed. Have bene raising my invoices this afternoon.

That said, I'm doing all the work so feel that clients are getting the better deal, they get 50% just for signing one piece of paper!! Not only that, they can offset my fee against tax, so end up with more than the 50% in their pockets.

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By AnonymousUser
06th May 2005 13:06

As a rough guide, if it helps
For clients for whom we are not providing a bureau payroll service, we are offering to file their forms P35 online for £75, + £5 per form P14, plus VAT. We are beginning to regret it.

There is certainly a case for front-loading a higher charge in the first year than in future years, because much of the time taken on entering "permanent" information of employer/employee details, getting FBI2 authority recognised etc will not be repeated.

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By Ken Howard
06th May 2005 13:09

Who does what?
So, you get £825 incentive from the IR over the next few years, and the accountant is charging £300 of this. Therefore, you get to keep £525.

So, let's look at who is doing what.

For his £300, the accountant "may" have to buy new computer equipment, software, broadband connection, etc. (He may already have this, may have been doing it anyway, or may not have done it other than for on-line filing - only your accountant knows that!) He has to register for online filing himself and then has to register each client - yes, only a form to complete and for the client to sign, but there is admin costs of writing covering letters, posting etc., not to mention the possibility of forms being lost either by Royal Mail or the Inland Revenue. Then there is the time in training himself or his staff on in his payroll software or IR software (again probably minor, but can't be ignored). Then the potential headaches (as evidenced on this and other sites) of software failures, IR website problems, etc all of which take time.

So, what does the client have to do for his £525. Sign the FBI2 form sent by the accountant.

Doesn't sound like a bad deal to me.

Of course, it is completely up to the client to do all this himself and file himself, in which case the accountant cost would be nil and he would get to keep the entire £825.

And no, as a firm, we aren't making fixed charges for on line filing. We are continuing to charge on a time basis, so the extra setting up time this year will be charged and then any extra time in subsequent years will be charged. I suspect that £300 over five years is probably about the level of the time charges for the on line filing.

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