Hi all. Maybe a daft question this but do you have any issues with a ltd co sole director client preparing own tax return and asking you to check it over. I think it's to save costs which I can understand but I don't feel like I want to review his work for free. Should I be straight and say I can't review as I have not prepared the workings etc? Would appreciate second opinion thanks.
Replies (10)
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Do you mean he is asking you to review the company's tax return, and presumably give it your imprimatur, for free? If so, just tell him you are not a charity. Tell him the fee will be what you would have charged for preparing it in the first place had he asked you to do so (+ 20% if your review reveals errors that need to be corrected).
Presumably you prepared the accounts from which the return has been prepared?
Accounts preparation surely requires tax calculation?
If you are preparing the accounts but he is computing the tax how do you incorporate the tax charge into the accounts? If you have already computed the tax in order to prepare the accounts surely completing the CT600 is a pretty quick operation, so he cannot be saving very much.
Good point
If you are preparing the accounts but he is computing the tax how do you incorporate the tax charge into the accounts? If you have already computed the tax in order to prepare the accounts surely completing the CT600 is a pretty quick operation, so he cannot be saving very much.
If the client is capable of doing it, why not?
As the years have gone by, more & more of my clients have got to the stage of doing their own personal tax returns and, even the company accounts and CT stuff.
FreeAgent for example now prepares simple SA return incorporating Self Employment and has, always had a good stab at the CT calculation. Others are and will follow.
These clients do retain me though to check them over for a fee, can't see why they'd expect me to do it free?
read the question
or is the OP really talking about the Company return, after seeing his response?
Technical input
I don't see anything wrong with a Ltd Co (exempt from audit) preparing it's own accounts and tax computations and asking for a technical review by experienced tax advisors, obviously at a commercial fee (several £ '00 I think).
Provided that there is full co-operation and it is not a "last minute panic" job immediately before a deadline then seems fine to me.
One other thing it must be UK owned and operated company, no foreign ownership, no Trusts involved or offshore arrangements from my viewpoint.
Here's some of the sort of things that I'd check / request:
Accounts add upRepairs analysis to be provided by CoLegal/Professional Fees/Subscriptions analysis requiredSundry Expenses analysis requiredIf private benefit items included in P&L then confirmation declared on P11D otherwise need to debit to DLAConfirm stock valued at cost /NRVAged Creditors ListAged Debtors ListDirectors loan a/c transaction history for the yearFixed asset movements full analysis by individual transaction dateConfirmation of no associated companies (or precise details to be provided - as this can affect AIA and CT SCR)Related party transactions to be summarised by the company and confirmed conducted at market valueBank statements + reconciliation for month to FYE and month after FYEPrevious year's CT computationsAnnual return / confirmation of any changes sincemore items depending upon particular entries found in P&L and on BS
i disagree with the last answers checklist OTT
in law the directors are responsible for the accounts , you can rely on their statements and of course you are entitled to complete / look over the tax return , you simply need to have an execution only letter of engagement / action with additional liability exclusions
@djkl
Just thought I ought to mention that I read (on aweb i believe) that some accountants only use an estimate as the Corp Tax due.
The other point is s455 - if one is checking the Corp Tax Return one needs to check that the CT600a is correct.