A friend has his tax return done by a firm of accountants that has recently changed hands.
The new firm (X) has charged him significantly more than he was charged in the past although his circumstances have not changed.
It turns out that there is a dispute between X and the employer of another family member and so he wondered if he was being penalised for the family connection.
Apart from the obvious reaction to take his business elsewhere, any thoughts on what he could do? Firm X does belong to a professional body but not my own one. He has not so far queried the bill with them for fear of incurring further costs.
Any guidance would be appreciated.
Shirley
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Replies (9)
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Difficult situation
Hi Shirley,
There could be a number of reasons for the increase in price; does it break down on the bill the hours charged and the billing rate?
It would be terribly unprofessional for Firm X to charge additional fees based on personal grievances, however it would be terribly difficult to prove that this was the under lying reason behind the price increase.
As the components of the bill internally for Firm X will only be the hours worked multiplied by their billing rate, it may just be that the new firm has higher billing rates, and they may view that the extra income they will receive from the additional fees paid by the existing clients who stay, will out way the lost fees from any people who leave……but that is just speculation.
Your friend should not receive any further costs for querying the bill, as this, as standard, is not a billable service.
Your friend could query the bill, the increase, and literally give them an ultimatum, either they shuffle things around internally to reduce his bill, or he will walk, as it is always worth haggling before taking that decision to leave.
Was the fee not quoted and agreed before the work was done? Very odd that if the firm wanted to increase its fees they wait until after doing the work to make this known.
A1hux probably has it spot on.
Hi Shirley
It's always good to hire from a fellow Martin.
Many firms who buy out smaller ones do you to strip the cream of the clients out by applying there charging structure to the business. The clients at the bottom end of the list suffer and leave to move to a similar size firm to the one they were with before the buy out. Did you friend not ask for a quote or had they always pay the same amount so did not think to ask for a quote on this years fees.
If its a relatively simple tax return job arguably your friend would be served better by a sole trader accountant who will probably do as a good a job, for half the price and treat them with some respect.
AWEB is full of such guys.
Moving on to another firm for next year doesn't help with the unpaid bill for this year's work. Assuming the fee charged was not quoted and agreed in advance, I would ask for an explanation of the increase. If the response is unconvincing offer to pay last year's fee plus 5% in full and final settlement. That should do the trick.
Thank you for the quick responses.
I think that he had always paid the same amount. He would have been with the previous firm for about 4/5 years.
My thoughts so far had been to ask if he had an actual letter of engagement for the previous firm and also what had he been sent when he was told that his account had been transferred to the new owners. The new firm operates from the same premises and may even use the same staff.
He didn't appear to have received any kind of breakdown, just a one liner without any explanation as to why the figure was so much higher. (He hasn't told me what it was but I got the impression that it was a multiple of a few times of what it had been before.)
I'll see what else he can dig out.
The two smaller local accountants that I would normally have referred him to have both retired recently and, from what I have heard, the two other firms who took on their clients are overstretched. Pity.
Thanks again
Shirley
Loved the 5% suggestion
@johngroganjga
Our posts crossed. What a brilliant idea. I have the feeling that he has already paid up and it was only because our paths crossed that I heard what had happened. I'll suggest it to him.
Kind regards
Shirley
always paid the same amount
Over 4/5 years (or more). That may be why the fees have increased - the previous charge didn't reflect the work being done anymore? Depends on the percentage increase of course. The new accountants should have told him though.
Maybe they just don't want them as a client
It can happen with a change of ownership where the new owner cherry picks the most profitable clients and discards the ones who baulk at a fee increase. Is it just possible they are a Pita?
Unlikely to be a Pita
@andy.partridge
I don't think this chap is a Pita. Part of the original firm's portfolio went to a third firm and, as I know a couple of people whose accounts were transferred to the third firm, it will be interesting to see how they are getting on.
I can understand firm X cherry picking, but he doesn't seem to have had any prior warning of a fee increase. This is what leaves a bad taste in the mouth for me. I don't think that that is ethical.
Thanks for all the comments.
I find it interesting that over 50 people viewed this within the first hour of posting on a Saturday afternoon. I didn't expect to get any feedback until Monday!
Kind regards
Shirley