How to price this service

How to price this service

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Hi folks,

I have met with a prospect who wants help sorting their tax affairs. One rental property which has been rented out for about 10 years. Client will supply the information on a year-by-year basis, giving totals for rents received, rates paid, insurance paid, repairs/maintenance. We may have to summarise mortgage interest from the annual mortgage statements as client has only supplied mortgage payment details but it is not interest only at any point in time.

I was thinking of disclosing this to HMRC using the Let Property Campaign. We will simply use the data provided by the client to prepare rental accounts in usual layout/format, then compute income tax due based on marginal tax rate (client also has employment income and appears to be basic rate in all years).

Any ideas what I should be charging for this type of work? We normally charge around £250 to £300 per annum for property accounts and tax return service but I can't see a charge of £2,500 + being appropriate in these circumstances. Should I use an average hourly rate to give me an indication of a suitable fixed price?

I know prices vary from region to region across the UK. We are based in Northern Ireland and prices here tend to be a bit lower than UK mainland averages in my experience. Any guidance would be much appreciated folks.

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Jennifer Adams
By Jennifer Adams
20th Jul 2014 10:37

I've just had the same problem...

You must submit via the Let Property Campaign - you have no choice.

I had a similar problem of deciding what to charge a client who had not declared 5 years lettings.

I also initially thought £250 per tax return. I told client to send in the stuff and I'd consider the cost depending on how good the bookkeeping was.

Under the Campaign you dont actually have to do tax returns - its just an online form, tick boxes etc. You insert the employment income and PAYE deducted onto the form and the form does the calculation for you. No need to load anything onto your computer programme. There is also an online spreadsheet that does the interest calculation for you. So it doesnt take that long to do. Far shorter time than doing the actual tax returns.

I took the long term view in that I didnt want to put the client off with too high a bill - (the unpaid tax, penalty, interest bill would be enough for the client!) and that next year I would be doing the full tax return (and hopefully for a number of years to come!)

So for 5 years I charged £750 telling client that I would charge my usual fee for the coming years. I still made a profit because, as I say, the form does everything for you.

Actually I will charge £25 more than my usual next year.

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