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Competition in London

Competition in London

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Hi All,

Recently had a catch up with an old employer/good friend who has built up his practice over the last 30 years.  Was shocked when I asked him how business was and he told me how competitive it is getting for him and he's lost a few clients to a new practice opened nearby who are offering Accounts and Tax Return for £150 and the first year free! 

Has anyone else come across anything like this?  Is this a good idea or is it just an accountant struggling to get by in a competitive environment?!

Replies (45)

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By ShirleyM
14th Feb 2014 17:38

I hope it isn't a sign of the times

We will all be busy fools if we do the same .......unless the £150 is for minimal services, ie. form filling & filing only, and no registration as a tax agent so no hassle from HMRC.

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Replying to legerman:
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By tezgun
14th Feb 2014 17:44

Apparently full service for small self employed!  Must be hard to explain to the client you get what you pay for, and I don't understand how they physically can do this with premises costs and overheads etc?

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Replying to legerman:
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By njpandya
23rd Feb 2014 11:21

Face the reality

These things are real and now the people and business are willing to go beyond the service & not just stick to agreements.

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Stewie
By Stewie Griffin
14th Feb 2014 17:47

Going to change my model

I reckon I should make my team redundant and outsource all my work to this guy.  I'd make a fortune!!

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Replying to mr. mischief:
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By tezgun
14th Feb 2014 17:50

Ha ha!  Good idea! 

Ha ha!  Good idea! 

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By David Franks
14th Feb 2014 17:54

? Easy

Its impossible to comment on this as we do not know what volume there is to the accounts or what format they are coming in in. If I could get one of my book keepers to rattle them into a spreadsheet in an hour and they were straight forward tax wise, I can fill in the HMRC online SA100 in less than 5 minutes so could still make several hundred pounds per hour. How long do other people think this would take? Based on someone straight forward like a sub contractor or someone without a balance sheet its a 5 minute job. 

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Replying to ireallyshouldknowthisbut:
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By tezgun
14th Feb 2014 17:59

Hi David, really interesting point, but is it worth the trouble of dealing with difficult and needy clients, and what if they do a disappearing act after the first year? 

 

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Replying to ireallyshouldknowthisbut:
By ShirleyM
14th Feb 2014 18:10

It isn't the actual work that takes the time

David Franks wrote:

Its impossible to comment on this as we do not know what volume there is to the accounts or what format they are coming in in. If I could get one of my book keepers to rattle them into a spreadsheet in an hour and they were straight forward tax wise, I can fill in the HMRC online SA100 in less than 5 minutes so could still make several hundred pounds per hour. How long do other people think this would take? Based on someone straight forward like a sub contractor or someone without a balance sheet its a 5 minute job. 

Apart from all the red tape of MLR, engagement letters, etc., it's checking the records, and that expected expenses are present, educating the client, explaining the tax, making recommendations, getting approval .... they are the things that take up the most time .... and the client benefits from an accountant who tries to help. We could all bung a few figures in a tax return and file it for a low fee, but not if you want confidence that it is correct and to do your best for each client.

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By David Franks
14th Feb 2014 18:34

I agree

I am not sure we are all talking about the same thing here. I am talking about a small sole trader or sub contractor who has few expenses. We all know what we would expect to see so a quick email saying 'you don't seem to have included anything for your phone' is not going to take long. As for a approval we issue a standard form to complete with the accounts for the client to sign. this takes no longer than attaching to an email or putting in an envelope. I am not saying every client could be done for this price but someone small with low volume could be. When you say explain the tax do your clients actually want this? We tell them how much they owe and when it is payable. If they wanted to know more we would tell them but most seem happy to leave it at that. I think it is ok to offer a basic yet correct service. We are in a recession and for a lot of people they would rather have the facts and figures and a reasonable price than flouncing and time wasting to bump up the fee. If people want to feel more love and have meetings, business advice etc then they would have to pay more. I never cease to be amazed at what some accountants charge. I am not sure if it because I have been doing this job for a very long time but it really does not take very long to do most jobs once they are past the book keeping stage. 

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Replying to Ruddles:
By ShirleyM
14th Feb 2014 20:18

Own experience

David Franks wrote:

...... When you say explain the tax do your clients actually want this? We tell them how much they owe and when it is payable. ......

I 'sort of' ask the client ... I say 'I'll talk you through the accounts/tax before you sign, if that's ok', and none of them decline. I have only two clients who approve by email, so I guess we attract the clients that like a personal service, and who like to have things explained. I get many comments from potential clients that their current accountant never explains anything, but then, I wouldn't want to spend much time explaining things in detail to a client who wasn't paying for my services.

I wonder if the 'free first year' has a tie in period for several years? I remember an ex-member considering doing the first year free, but I don't think they went ahead with the idea, but I may be wrong.

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By mrme89
14th Feb 2014 19:56

First year free? How many will accept the free year and then look for an accountant willing to do it for £145?

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By David Franks
14th Feb 2014 21:18

true
Yes would never do the free year option. I think only 2 of our 250 customers are interested in anything more than tax bill. We don't charge for calls or emails and we are very friendly and socialise with a lot of clients but in the same way I just want hot water but not be taught how to fit a boiler they don't want to know the workings of tax.

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By ShirleyM
14th Feb 2014 21:36

No, but ...

I would want them to explain how the boiler should be operated, and what I needed to do to keep it running efficiently. I wouldn't want any bad fumes coming my way (re HMRC).  ;)

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By Sheepy306
14th Feb 2014 21:48

@ David Franks
Oh dear, we had a new boiler fitted in November and I recall numerous in depth conversations with the plumber about magnaclean filters, heat exchangers, energy efficiency, makes and models of boiler options, extended guarantees and servicing requirements. I guess I'd be the accountancy equivalent of a time consuming client, wanting to know the technical reasons with my enquiring mind.

Back to the OP.......I'd never do a free first year followed by cheap annual fees, it would be one or the other, but if the business model was right then £150 for a very simple return/accounts would be possible. I wouldn't base the operation in London though and I'd quickly hand back my ACCA membership, the least regulation possible would be ideal! And my staff would probably consist of an apprentice earning £3 per hour or whatever you can get away with these days.

If you've based your practice on high volume low margin work and now someone's undercutting you then that's just part of the game that you've been playing for 30 years.

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By David Franks
14th Feb 2014 21:54

agree
Well we let everyone know what they can and can't claim. We are ccab and ciot. Wouldn't do a free year. Could do very small people for 150. Other than having to deal with hmrc, it's a well paid pleasant job. Not in London though and have no desire to be.

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By MDK45
15th Feb 2014 08:39

Remember when Accountants had the biggest houses in the streets along with the doctors and lawyers, it's a new world now!

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By David Franks
15th Feb 2014 08:56

regulation
Firstly I still say it's pretty easy to make a good profit in this game. I actually do live in the same street as 6 doctors but no lawyers. However, their professions are regulated whereas ours allows anyone to call themselves an accountant as long as they don't claim to be chartered. Also, whilst some tax work is very complex and highly paid some is not, so to compare all 'accountants' to say a heart surgeon is not a clear comparison. I still say it's relatively easy to make good money at this but if I wasn't I'd do something else rather than continue. The only thing that will drive me out of this job is hmrc.

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By AccountancyMarket
15th Feb 2014 12:24

Race to the bottom

It sounds like at race to the bottom that we should try not to follow - leave them to it. I agree with Shirley M, it's the set-up & red tape of new clients and corresponding with them which can take time on top of just reviewing the figures.

The other day I had an email query from a person looking for lower fees than their current accountant  - that was their sole intention, to find a cheaper accountant than one who I already know is quite cheap. I responded but didn't pursue them much further as I know they will be a pain of a client.

It's true though that SA & Sole trader tax returns are becoming more commoditised, eventually we might have to leave these to the £150 providers, and maybe even outsource some "admin" work to them like Stewie Griffin said. I find that the clients I'm picking up post the SA deadline are those that tried out these low fixed fee providers but who now want a more personalised, bespoke service that looks at and understand their business. The key for me is to have a niche and personalised service and help the business in suggesting process improvements which save them time - my fees are then justified and I get more satisfaction than just doing admin of people just looking for their SA returns to be done.

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Teignmouth
By Paul Scholes
15th Feb 2014 12:26

Look at this from the other end

There are over 4M self employed people in the UK and a survey I heard about said that the majority do their own tax return. Coming at it from that end, it is hard sometimes for an accountant to justify what they do, ie what extra can the accountant add to a job that most self employed people can do themselves?

Yes, of course, we (hopefully) add more accuracy and compliance and, might even be able to save them a few quid in tax & NI, but if someone has done their own return for 10 years, without query from HMRC (whether it's right or rubbish) and doesn't have a huge tax bill anyway, why would they pay more than say £50 (let alone £150) to give it the once over, which is effectively all we can really justify doing, especially if they fear, or know, that they have overdone some of the expenses in the past.

The real work in preparing accounts & tax return comes during the year, in keeping the books and, like Shirley, I've always been keen to get the client as expert as poss in this area so that I get a clean set of books at the year end.  

With improvements in IT however I am doing myself out of work and one I took on a couple of years ago, in a mess and a fee of £650 pa, will next year keep 99% accurate books and be able to do their own return, on FreeAgent, with me charging him £50 to check it over before he hits the button.

So I can understand how someone might make a good living out of charging £150 to say 300 basic self employed people, all you have to do is hook them with year 1 free, then you can show them how much better and safer the work is when you do it and the free year is easily made up when a small proportion go on to become "Biggies".  

 

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By taxguru
15th Feb 2014 13:01

It is the recession

As the recession prolonged accountants found it difficult to get jobs. So, many took the plunge and set up on their own. There are n number of accountants out there offering everything for £14.99 upwards. In fact the traditional practices may find it difficult to survive unless they adapt. What we are witnessing now is as follows:

- online business/e-commerce etc means even small and family businesses are going global. Setting up shops within and outside the EU has its tax consequences VAT, CT or otherwise and accountants need to to be up to scratch with the laws

- clients are aware of the competition and they shop around for the cheapest option; even at the price of breaking a 20-year old relationship. Compliance work is down to price; price alone - the cheapest offer bags the client. 

What this change means is that with all the paperwork, internal compliance burden, annual subscription, PII, practising fee put together qualified accountants are the worst hit!!!

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By ShirleyM
15th Feb 2014 13:09

Curiosity got me again :(

I'm glad I am not just starting out in accountancy. A quick google found some London accountants doing s/emp tax returns for £50, if turnover under £10,000.

Companies under £20K cost £240.

They must rely on having massive numbers of clients with a quick turnaround on the work.

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Sarah Douglas - HouseTree Business Ltd
By sarah douglas
15th Feb 2014 15:55

I sit somewhere in the middle

sorry it posted twice 

 

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Sarah Douglas - HouseTree Business Ltd
By sarah douglas
15th Feb 2014 16:01

I sit somewhere in the middle

Hi 

I can see both sides here.  I am a bit like David I just want the hot water.  I was like that about my Iphone I listened to everyone's bad views about the IPhone and I changed phone for 2 years now I have my Iphone back and it is simple  and it just works and I am happy again .  I don,t care about the IT buffs say about all the in and outs about Iphones .  I do want more on other things at times but I happy that I would need to pay extra. 

Our practice is mainly focused on giving clients a lot of time through Management accounts, mentoring Skype calls extra but only if they want that.    This service is much dearer but that is what some of my clients want and they are willing to pay for their meetings and calls as we do not do fixed pricing for this reason.  They get very detailed info in their calls and meetings and if they were not  happy they would not pay.  

However I then have clients who are not so well off and our maybe struggling and do not want meetings.   Since I have moved into my new office I have had a string of new clients especially young self employed trying to get started who have walked  in with all the information and MLR documents ready.   They are really easy to deal with as they what to keep the bills down.  These jobs do not take long at all especially if the client is not demanding and it is in the terms and conditions.   If a client is wanting more time we clear it with them and let them know they are going beyond the budget they want to.   Some clients pull back and some our happy to pay more.  I was like that with some of my very long term clients at the beginning and they were happy with our service and stayed

No I could not run my business on these clients on their own as I do not have a large enough volume of in out customers  but I am certainly making money from them. Yes of course their are clients that what more without paying but that is up to you as a practice to be firm.    In the last 3 years I have become very firm as those type of clients stress me out no matter what level they are and I just do not like people like that in work or home life.  I am better now at picking up on trouble makers now.  Very short notice for deadlines is one and everything is mega urgent. 

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By peterdell
15th Feb 2014 21:28

Mr Scholes

Having worked on both sides of the tax fence, for all those who think cheap fees are a good thing may I highlight three individuals who I know of, who committed suicide on the back of HMRC investigations. How many times do I speak to contractors who don't protect their IR35 position or there are no reconciliations in the accounts. Going down market, doing things on the cheap is like driving without insurance. You only realise the seriousness of the position when you are in an accident.

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By David Franks
15th Feb 2014 21:27

hmm
There seems to be an assumption in this thread that there's a direct correlation between fee rates and quality of work.

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By peterdell
15th Feb 2014 21:40

David Franks

I already mentioned it on another thread a contractor wants to pay £600 for a full yearly service. That's 75 companies for 45K for one person. Not possible. Of course he never heard of IR35 let alone done anything about it. The company he works for is ripe for investigation. The Revenue would be onto a huge tax take.

I agree there is huge inconsistency in levels of service and quality and just because you pay more wouldn't necessarily get a better service. However what I can be pretty confident about is that if you are paying £600 for an annual service, you become the subject of a HM enquiry your going to have many more sleepness nights.

 

 

 

 

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By ShirleyM
15th Feb 2014 21:44

My thoughts are ...

There is no guarantee that expensive  = high quality. There is no guarantee that cheap = high quality either, but logic tells us they have to save costs somewhere.

If the saving is made through efficiency, then it could be good quality. If the low cost is achieved by cutting corners then it is likely to be poor quality. If the saving is made by hiring cheap labour/free interns, then the low fee may be unsustainable.

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By David Franks
15th Feb 2014 21:57

?
I am only talking about a small sub contractor for 150. They generally have monthly income statements, fuel receipts, phone and tools. These records can be typed up in 15 minutes. 5 mins to put into profit statement. 5 mins to fill in tax return. Let client know refund. Refund comes to us first so no payment chasing. Existing customer. Got to be 100 profit for an hours work. Some clients pay us thousands a year but these 150 jobs are stress free and I'm happy to have them in our portfolio.

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By peterdell
15th Feb 2014 23:17

Agree with you both but when

Agree with you both but when does efficiency become cost cutting. I always make it a point to visit a client at their home (provided the client agrees) then I can assess the merits of a home as office claim, the value of the vehicle and other assets coming into the business and the persons personal circumstances. If I do this over the internet then the merits of any claim are guess work, but its a lot cheaper although admittedly have a few of these jobs as well. There is a danger in the cost cutting which has been going on for a decade that accountants become a file only service. And where Paul Scholes says that most self employed complete there own tax returns (I suspect from the lack of enquiries I and many other accountants have) that the vast majority of enquiries are on unrepresented tax payers (or dodgy accountants). Unrepresented taxpayers will accept what the Revenue state as fact and pay more at enquiry. Unrepresented tax payers will also pay more because they don't know where the line of what to claim is drawn.

To illustrate this I  have an email in my inbox from 12 Jan requesting I review a persons tax because they think they have overpaid. I look at the job what would it be worth £150 max  because its a review I am not doing the accounts. Minimum five hours work when you factor in emails, money laundering etc. My response I would rather post the details here than bother replying. The client remains unrepresented and overpays tax, I don't get the client because I know the fee wont be the £350 that I would require to make a reasonable return. And the winner is HMRC. Maybe that's the plan to get rid of the small accountants. 

 

 

 

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By ShirleyM
16th Feb 2014 10:43

I don't understand the obsession with visiting clients

I moved into an office so I wouldn't have to go travelling to clients. Clients like the fact that the office is open 5 days per week and there will always be someone to answer the phone, accept records, etc.

I only go into detail about Use of Home if they want to claim amounts above the £4 per week. The value of the vehicle is pretty easy to assess from the records. If profits are consistently low then I will query their living standards, current debts, etc.  

The majority of people are honest because they are not risk takers. The ones to be wary of are the ones who think they are cleverer than the accountant, and the ones who just want to be rich or be high flyers, but they are either not getting there quickly enough, or they won't put the effort in. These are the risk takers, and quite a few really ambitious people have no conscience at all, and will ignore rules, and trample over decent honest people to get what they want. 

The average guy in the street, who just wants enough money to support him/her and their family, are usually very honest. 

Obviously, there are exceptions!

 

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By peterdell
16th Feb 2014 11:14

If you claim £4 per week for

If you claim £4 per week for all your clients, then there is a chance you are underclaiming in a quite a large way and not applying the guidance as set out in the Revenue manuals. There are no risks in applying the legislation set out in the Revenue manuals. Type home as office into the hmrc website and re-read the guidance. Imagine you paid for an architect and they say to you can convert a house into three flats and on a similar property up the road they build six. Which architect would you use!

 

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By ShirleyM
16th Feb 2014 11:37

Thanks, Peter

I don't need to read it. I know it. I don't claim £4 per week for all clients.

Maybe it is clearer if I say that I only go into detail if I can justify a higher claim, ie. if they do a couple of hours bookkeeping per week, and the main trade/professions is conducted elsewhere, eg. at their customers, then £4 per week is my recommendation. Where someone works mostly from home, ie. graphic designer, then I will get more details from them to justify a higher claim. Sometimes, clients don't want the hassle of totting up the bills, and are happy just to claim the £4.

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By peterdell
16th Feb 2014 11:47

But thinking about it you have illustrated the point. Eventually we will all work to the lowest common denominator, set up the engagement online, clients records via the internet, never need to see the client, never know their circumstances and put in ultra conservative claims so that we protect ourselves. Lower fees = more tax to the government. Not surprising HMRC are happy for anyone to be a tax agent so that costs are driven down and then we become file only agents.
 

And just to clarify I am not criticising because its the way its going and you are right to go with the market, I am just saying that the industry is not a good place as was suggested above.  

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By ShirleyM
16th Feb 2014 12:01

Is it to protect ourselves ....

... or is to protect the client? I would say the two are not mutually exclusive. 

I try to prepare accounts/tax that will stand up to scrutiny. I recently helped a new client who was being bullied by HMRC and they were trying to disallow genuine business expenses. In the end, they didn't disallow a single penny, but some accountants would maybe not have stood their ground, and let the client pay the extra tax? If I feel the expenses can be justified, then I will always claim them, but not otherwise.

EDIT: "And just to clarify I am not criticising because its the way its going and you are right to go with the market,..."

Peter, you seem to under the impression that I am one of the accountants offering these cut-price service. If so, you are mistaken. If I appear to be defending them, it is because I try to look at things from all angles.

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By peterdell
16th Feb 2014 12:05

That's part of the point

That's part of the point unrepresented tax payers will pay more tax because they believe that the Revenue's tax calculations are accurate. The Revenue are a tax collector, their job is to maximise the tax take and as a tax payer that is what I want them to do to fund public services. How many people bullied by HMRC just accept what they are told as fact?

You wouldn't go into a court trial allowing the prosecution barrister to also be the judge!

File only services are akin to not being represented because as agent you will wash your hands in the event of a problem and just to clarify I am not saying or evening suggesting your a file only service because clearly you provide many more services, its just where we all end up.

 

 

 

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By ShirleyM
16th Feb 2014 12:10

I agree

I have seen some real rubbish tax returns submitted by clients in their attempts to save a few bob. In that instance, someone providing a filing only service may point out the obvious errors to them, so a cheap job may be better than nothing.

However, you cannot help everyone, especially those who do not want to be helped, so I won't waste time worrying about unrepresented taxpayers. I do some pro-bono work for deserving people, but not for the idle, or freeloaders.

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Jennifer Adams
By Jennifer Adams
16th Feb 2014 13:01

The future for accountancy...

As taxguru says in the recession many accountants took the plunge and set up on their own. In my local feebie magasine - The Blackmore Vale - for years and years there have been just two accountants advertising. There are now 13 - all really offering the same type of service ie ordinary completion of accounts, tax return etc. Nothing to make them stand out from the others.

I submit accountants will need to think hard about the service they give to survive in the future and not rely on locality. My client case is increasing because I specialise. Not as solicitors do but I advertise that I know what I'm talking about with reference to the clients particular business.

A friend of mine is increasing his client base through just doing payroll. Many businesses find RTI difficult or time consuming and he is finding that by pushing this as his only work (specialising!) he is doing well. He can then pick up any clients that he feels need his more detailed accountancy skills.

Something else that many accountants are behind the time with is centering their work round a particular location. I dont see 75% of my clients as they are out of my location; many are abroad. All contact is via email or text, mobile phone.

Do these 'free first year' providers do engagement letters- would you think?

 

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By petersaxton
17th Feb 2014 03:19

Varies

If a client has one to three P60s I will charge them £100.

A P60 and property income - £150.

Small self employed business £250 - £350.

I prefer small limited companies and I usually charge £400 for very straight forward ones up to £1,500.

I may charge a bit more for a few clients for extra work such as VAT returns or doing bookkeeping.

I work from home and keep the costs and fees down. I can do this because I insist on how they have to provide the information if they want to keep down the fees.

I do know I get a good rate from my clients because I compare the fees to time spent.

I may do some marketing soon after relying on referrals for years but this is mainly because I want to see if I will enjoy it and if it will be effective.

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Teignmouth
By Paul Scholes
17th Feb 2014 12:55

Similar to Peter (Saxton) although...

my fees range far wider, eg £100 to £2K for a personal tax return and £300 to £5K for small Ltd Companies.

My typical base fee per client has dropped dramatically over recent years, eg, 3-4 years ago I wouldn't have looked at a Ltd Company for <£1,500. Like Peter, I now run from home, and so no longer have an office to support but the biggest reason for the reduction has been a significant drop in compliance work I do for each client.

Peter (Dell) I agree completely that there is a risk in remaining unrepresented however, no matter how much you bang on about it being wrong, the fact is, more & more people will DIY and this is particularly true of the new young entrants, who source all their needs via the internet & apps and who will use joint filing and ultra-cheap services to do the annual stuff.

As I've said in past threads, the logical outcome is that, in a few years, business records will link directly to government on all aspects, even year end, and with simplification of accounting and tax rules, software will pretty much handle 95% of the compliance work we currently get involved in and £150 for a tax return or set of accounts will seem expensive.

Firms are already latching onto this by advertising the accounts & tax return work as being free of charge.

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By Jim100
17th Feb 2014 14:42

competition

When supply overweighs demand prices are going to fall.  There just seems to be too many accountants per capita in the UK compared to other EU countries and America.  Understandably many accountants are deciding to opt out of employment and go into practice.  If you have good round knowledge in accounting then seems to be natural route to go to. - coupled like someone else mentioned that anyone can set themselves as an accountant and no client seems to ask about experience and qualification.  Most clients just want to pay as cheap as possible as they do not understand how an accountant can help them.    Work does seem to be diminishing with technology and will go down further as for example HMRC attempts to take more people out from filings tax returns.  I suspect there will be other changes at the detriment to accountants.  Thoughin recent years RTI and ixlbr has probably created more work

It will get worse and to safeguard my future I have had to set up in India where the costs are a third and efficiency is high.  In fact a lot of accountancy practices in India are marketing their services to UK companies at ridiculously low prices.  I suspect the low prices mentioned are from Indian companies having a presence in the UK where they outsource the services back to India. 

On the postive side I think sole practioners like myself working from home will cope (albeit much lower income) as they offer the service and flexibility but the large practioners may struggle as their charges are just far too high and the service poor.

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Replying to Tim Vane:
Man of Kent
By Kent accountant
17th Feb 2014 16:58

No they don't

Jim100 wrote:

"Most clients just want to pay as cheap as possible as they do not understand how an accountant can help them."    

If the one's you're speaking to do, then you're attracting the wrong type.

There are loads of businesses and individuals who want a good service for a fair price.

I don't agree with all this huff and puff about prices falling, margins being cut if your business is well run.

If your business is flabby and poorly run, provides an indifferent level of service and attracts price conscious clients then yes you will suffer.

Set your stall out properly and you'll be fine and perhaps do very well. 

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Replying to andy.partridge:
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By Jim100
17th Feb 2014 18:27

Price is a major determinant

We are know most clients will not move to another accountant and price becomes a less important factor though if they find out other accountants offering a lower price they may try to negotiate with their current accountant. When there is a potential new client who may contact three or four accountants then price will become more important in their decision making.

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By Sheepy306
17th Feb 2014 15:51

@Jim - and therein lies half the problem. The knee jerk reaction to competitors undercutting you is to reduce your prices further, which in turn just fuels the competition. I am rather making the assumption that by outsourcing to India you are then reducing your fees to your clients? If you're not, and you're simply increasing your margins by reducing your costs then well done!

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Replying to Jo Nokes:
Red Leader
By Red Leader
17th Feb 2014 16:35

and yet ...

When HMRC introduced their own online system for submission of SA returns, I expected to lose many SA clients. One or two left, but very few.

Will this next move to the cloud, etc really have such a dramatic effect on our businesses as predicted above?

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Replying to Jo Nokes:
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By Jim100
17th Feb 2014 18:19

Not necessarily reducing fees

Sheepy306 wrote:
@Jim - and therein lies half the problem. The knee jerk reaction to competitors undercutting you is to reduce your prices further, which in turn just fuels the competition. I am rather making the assumption that by outsourcing to India you are then reducing your fees to your clients? If you're not, and you're simply increasing your margins by reducing your costs then well done!

I was very relunctant to have a setup India but just noticed how difficult and competitive the accounting world is becoming and need an option for the future. They only really carry out the book-keeping, management accounting, payroll and other administration services at the moment but they are extremely efficient and offer incredibly low prices. I just do the more high value work though they may do simple preparation work later.  I dont intend to reduce prices but gives me an option and flexibility to do so. I only can see prices being reduced in the future as it gets more competitive.

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