How much is reasonable fee to charge an existing paying client for Accountant's reference / Certficate required for mortgage purposes
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It all depends on how much work you do for them during the year. If precious little, I would charge at least £150.
If I was involved during the year, I might not charge at all.
But so much depends on the individual circumstances.
Existing client acted for years probably, nothing or nominal amount depending on fee budget. Builds goodwill.
If newer client, or support, guidance and advice liaising with brokers than a fair hourly rate for the work.
The difficult ones are those that prepare there own tax returns and want an accountants opinion and report, these can be extremely expensive for a review especially if tax errors are more than likely to be picked up.
So, no easy answer.
'The difficult ones are those that prepare there own tax returns and want an accountants opinion and report'
Their, not there. I wouldn't do a report for such people. Would anyone?
If a good client then no charge.as only a few minutes work. If not a good client then charge for time taken based on your hourly rate.
I have always worked on the same basis but I am now finding that in some cases I am having to send copies several times to the client who loses them and particularly Santander who have asked for the same information again even if they have had it before. The number of clients looking to move/remortgage has increased and the demands of the lender have become more onerous so I will be charging in future, as I find I am increasingly absorbed by unproductive/admin work
£100. They're in the mince - valuation fees, surveyor's fees, arrangement fees, and so on.
£100 won't touch the sides.
For our commercial mortgage application we are indeed paying loads of fees, (for very little). See £400 to a former estate agent to walk round with a clipboard and give us an "energy performance certificate".
So, at least three figures seems fair or even a little light
A former estate agent... I like that.
Real estate has always been a bit of a racket. An estate agent client of mine would charge a four figure sum for a "full" house survey, which inevitably would recommend a further "specialist" structural survey or similar ("The property has some ingress of damp, for which we recommend s specialist survey of the damp proof course to ascertain the cause"). Gee, I guess that's why the walls are covered in mould. Well spotted!
£300 valuations took less than 5 minutes, and invariably recommended a "full" house survey.
I know this will upset you but we get ours done for circa £120 a pop.
Having said that they tend to be part of multi-let buildings and the chap who does them for us does tend to get all the instructions in our buildings on an ongoing basis so over the course of a year we must be fairly lucrative customer, that may account for the somewhat lower charges we experience.
I don't charge for clients and I wouldn't do a certificate/reference for someone who wasn't a client. You need to look at what needs doing, I can see why you are asking. I have found recently that brokers and lenders are asking for more information such as a selection of separate reports based on their templates using info from Report and Accounts etc. I've been asked a couple of times recently for two years trading information plus projected figures for the next year. When I've refused to produce projections for obvious reasons it has lead to a protracted discussion with the clients and brokers who were blaming me because the clients mortgage applications have been rejected because I won't play guess the figures.
I'm also finding that clients who have been rejected are then going to other brokers and starting the process again. I have one client who has applied four times to remortgage his house over the last two years to give him some cash to pay off other debts. The answer in his case is simple monthly income - expenditure doesn't leave enough to pay the higher mortgage.
Like others have said for a client who has a decent fee package with us we would not charge for compliance level client we would charge approx £100.
I am close to only doing them if they go with our approved mortgage guy as the ones with him always go through without issue whereas if you are using the in house people with a bank they sometimes get messy as they don't understand dividends etc. Throw into the mix the stamp duty holiday into the mix where everything is needed yesterday and £000's are to saved by getting it through by end of June you really should be charging. We also get fee returned to us from our mortgage guy which is not a bad passive income (disclosed of course).
What I suspect will also be an issue is what happened in 2021 ? If earnings have dropped in 2021 you will be expected to comment on future earnings and forecasts etc, whilst institutes may frown upon it, they will have to come up with a position where you can still support clients without hanging yourself out to dry otherwise. There will need to be special rules in place for what is classed as income for 2021.
I don't mind doing one without charge but have had a few clients where they have come back several times, asking for the same Tax Year Overviews and calculations I have already sent to them, then complain if I want to charge because I didn't the first time!
Then I find out that the mortgage company won't accept them from me as I am "only" ATT qualified, even though they will accept AAT, which I thought was a similar level?
The acceptance of AAT in preference to ATT is a joke. As an ATT person myself, I think it's only Virgin who won't accept ATT any more, but I do have an ICAEW person who will help me out in these circumstances.
I must admit i always thought that ATT was the tax-focussed qualification offered by the AAT. It is only in the last month or so that i learned they were separate organisations.....
Having done the exams of both around 10 years ago, AAT exams were laughably easy, and many of us finished the exams early.
I felt so embarrassed with the qualification I immediately embarked on ATT, which were much more testing.
I must admit i always thought that ATT was the tax-focussed qualification offered by the AAT. It is only in the last month or so that i learned they were separate organisations.....
AAT was set up by the ICAEW.
ATT was set up by the CIOT.
£50? £75 at a push.
I will often do them for free if the client wants one in a blue moon (say every five years or so). If they're renters and want a reference for a new tenancy every five minutes (or couple of years) i start charging. Same if they have a BTL portfolio that they are regularly mortgaging
I don’t normally charge however I do seem to be getting more than usual requested now however, this year I have had a number of clients in need of help with filling forms for housing and council tax benefits and those forms generally require a lot of input, so far I’ve filled them out free of charge as obviously these clients are in need of help to get through a rough spell following restrictions but I really think I need to revise this as spent a full day completely on these forms last week!
You are right to be concerned about the amount of time involved.
Even for regular clients I'm going to warn them what my charges will be if it all gets too time consuming.
This came up a few months ago:
https://www.accountingweb.co.uk/any-answers/information-for-mortgage-app...
There is, I believe, ICAEW advice that you shouldn't charge.........(I'm not ICAEW) - something to do with creating an implied contract? Whatever you do make sure you include a disclaimer.
BTW - I haven't charged separately so far (although I might build it into the fee review if the clients been over demanding ie repeat requests.....)
One of the more annoying wastes of my time recently was to complete a reference for a boy working CIS to renew his tenancy. Quite apart from why we need to do this fuss for someone already paying the rent, they demand it be done via an online portal with no facility to append the usual so of disclaimer we like or to modify the questions, which as only the accountant who prepares his return once a year, I can't answer.
Now while I could refuse to do this, it's hardly going to help my client and I can't quite bring myself to charge for this either - another interesting cost that those who rent seem to be lumbered with to the benefit of no-one.
Santander refused to accept my Accountant’s Certificate for myself. They insisted I get another Accountant to do it. I told them I wasn’t paying for another Accountant to do it. I understand the conflict of interest, but dismayed at the lack of trust. Others in the same boat?
About £100 but I would discount it (potentially by 100%) for regular clients who we make good recovery on and who pay on time. As someone else has said, increasingly it is getting to the point of lenders coming back with more questions or wanting something changing or something putting in about Covid, etc, etc. So I might not charge a regular for the initial report but issue a fee if we start getting in to ping pong. For this reason I am increasingly saying "We would normally charge between £x and £y for this but, as you are a good client, I am not going to charge on this occasion. However, several lenders are requiring subsequent information recently and, if this becomes the case, we may have no option but to charge for our additional time." That way, if the lender starts asking for war and peace, you can issue a fee without surprising the client. Equally, if the client doesn't even bother to let me know and the request just lands in my inbox from the lender, I am less likely to be benevolent, given that they are often accompanied by "we require this information by close of business today" or, if you are fortunate, tomorrow.
Have never charged for this service and always save the file with the 302`s/tax comps in for future use .