Best way to handle such a client?

Low but not a slow payer

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Hi folks

How would you handle a client who just dont want to pay for your valulable advice but keep trying to get something for free?

I just received an email from such client who has asked what expenses he can claim + how he can reduce his corporation tax bill? I am not sure if any practitioners are willing to give such information for free before sending him an email saying that this is a chargeable service?

Keen to find out.

TIA.

Replies (18)

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By Accountant A
24th Sep 2018 14:00

What is your agreement with the client in terms of the scope of agreed work and fees?

If this is beyond what you have agreed to provide, offer a tax planning meeting at an additional fee. Maybe have a 10 minute chat "free" to give some general thoughts.

Presumably you review his expenses and decide what is and isn't allowable for CT purposes - and then tell him what you've done.

In terms of how he might "reduce his corporation tax bill", that's a potentially large or small area depending on multiple factors.

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Replying to Accountant A:
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By ArsalanShah
24th Sep 2018 16:44

Accountant A wrote:

What is your agreement with the client in terms of the scope of agreed work and fees?

If this is beyond what you have agreed to provide, offer a tax planning meeting at an additional fee. Maybe have a 10 minute chat "free" to give some general thoughts.

It includes year-end accounts + corp.tax return + CS filing + Agent Services for a very nominal fee.

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By johngroganjga
24th Sep 2018 14:05

Surely the answer to his question is that all expenditure his company incurs wholly and exclusively for its business is allowable for tax apart from entertaining. Job done.

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Replying to johngroganjga:
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By WhichTyler
25th Sep 2018 16:18

And capital expenditure?

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By andy.partridge
24th Sep 2018 14:10

What does your letter of engagement say? If it is silent, you may be inviting an expectation of unlimited 'free' use of your knowledge as part of the package. That said, the questions being asked are not super-technical and so as I client I might expect you to willingly offer this.

If you have a client who uses up your time excessively then I would thank them for their queries and suggest a meeting. Meetings are chargeable in your letter of engagement, right?

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RLI
By lionofludesch
24th Sep 2018 14:13

I don't think that this is an unreasonable enquiry. On the other hand, the client needs to know that this is chargeable time.

Make it clear.

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Red Leader
By Red Leader
24th Sep 2018 14:25

I disagree. I think this is a routine client enquiry that would be part of normal service.

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Replying to Red Leader:
RLI
By lionofludesch
24th Sep 2018 14:38

Red Leader wrote:

I disagree. I think this is a routine client enquiry that would be part of normal service.

You don't charge for normal service ?

I'd be surprised if that wasn't a minority view.

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Replying to lionofludesch:
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By andy.partridge
24th Sep 2018 14:52

Depends on the detail and the resource required.

Common sense dictates that there is a certain amount of advice given as part of a core-service package - it's not free, it's included in the price - and that the provision of a moment's thought with a one word answer often doesn't get billed separately.

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Replying to Red Leader:
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By ArsalanShah
24th Sep 2018 16:47

Red Leader wrote:

I disagree. I think this is a routine client enquiry that would be part of normal service.

If this could save your client £££ in tax bill,why would you not charge for your valuable advice?

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Replying to ArsalanShah:
Red Leader
By Red Leader
24th Sep 2018 17:21

Ah yes, Value Pricing. Marvellous.

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Replying to ArsalanShah:
RLI
By lionofludesch
25th Sep 2018 16:22

ArsalanShah wrote:

Red Leader wrote:

I disagree. I think this is a routine client enquiry that would be part of normal service.

If this could save your client £££ in tax bill,why would you not charge for your valuable advice?

What if you can't save him anything ?

Is it free ?

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By paul.benny
24th Sep 2018 16:45

You have to decide how valuable this client is to you and how much non-billable time you want to spend on him.

It's reasonable for your client to expect occasional general guidance (the sort of thing you don't need to look up) as part of your normal service. But there will be a point when you have to spell out that the time is chargeable.

The same is probably true of your client's business. S/he may provide samples etc free of charge - but only to a point. And beyond that the customer has to pay

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Replying to paul.benny:
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By Accountant A
24th Sep 2018 18:07

paul.benny wrote:

You have to decide how valuable this client is to you ...

Not very by the sounds! OP's reply says "... for a very nominal fee".

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By ireallyshouldknowthisbut
24th Sep 2018 16:48

I am intrigued as to how you can offer a service to clients without offering to answer such questions as a matter of routine business.

Then again we are just taking on a new matter for a client who has been charged the thick end of £1k for copying his lead schedule onto a tax return and that seems to be about it.

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By Matrix
24th Sep 2018 18:26

In my view advice on the deductibility of expenses should be part of the service for preparing the company accounts and tax return. If they are asking about specific tax planning such as pension relief, rent of home office, R&D, capital expenditure etc which are outside the day to day expenses of running a business then you will need to provide a quote.

I don't see why you should charge for advising whether travel and mobile phone etc are allowable expenses. Surely it is better to provide upfront advice rather than getting the books and they have put through everything.

New clients or start ups require more help but this pays off in the long term if they don't put through personal expenditure and you have already had these discussions before you get the books.

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Replying to Matrix:
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By Dib
25th Sep 2018 17:20

Don't see why you wouldn't put travel and mobile phone though the company's books.

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Replying to Dib:
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By Matrix
25th Sep 2018 20:24

You can put them through the books, there may be tax implications of doing so.

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