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Fees

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A new client advisd that he was quoted £ 600 plus VAT by a firm in the same town as us to complete his self assessment tax return.

He has around 20 items that need included in this return - straughtforward, no complexities.

How does this compare to your fees, as his is significantly greater than our fees?

Replies (42)

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By zebaa
05th May 2022 10:47

I think they either do not want the work or suspect he may be a PITA and are looking to charge for that.

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By Wanderer
05th May 2022 10:47

You are asking others to indicate their fee levels without quoting your own other than to say "his is significantly greater than our fees" which doesn't really tell anyone much.

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Replying to Wanderer:
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By murphy1
05th May 2022 10:51

Not intentional - £ 150 plus VAT for such a straightforward piece of work

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Replying to murphy1:
RLI
By lionofludesch
05th May 2022 11:41

murphy1 wrote:

Not intentional - £ 150 plus VAT for such a straightforward piece of work

Probably around what I'd've charged.

Lots of caveats, though.

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Glenn Martin
By Glenn Martin
05th May 2022 11:23

Surely a P60 + Dividends is straight forward, you say he has 20 items to consider which surely is not straight forward, and I wouldn't be doing it for £150.

What happens if he only sends you 16 of the items etc and you have to chase to get them. £600 is at the top end of pricing but from what you say the return is not simple.

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By meadowsaw227
05th May 2022 11:39

Entering 20 items onto a tax return is not straightforward IMHO

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Replying to meadowsaw227:
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By murphy1
05th May 2022 11:42

In case I have not explained properly - 12 are sales invoices and the others expenses. Not 20 diff boxes in the tax return

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Replying to murphy1:
Caroline
By accountantccole
05th May 2022 11:54

So it is a sole trader set of accounts, with capital allowance considerations and planning opportunities to be built in? £600 sound reasonable to me on that basis. If you are only processing what he gives you and not asking other questions the other accountant may be able to make savings that more than cover the fee differential?

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Replying to murphy1:
RLI
By lionofludesch
05th May 2022 11:54

So it's self employment ?

That might up my fee a bit.

I was thinking he'd got something like a P60, P11d, a few dividends and a few boxes to tick.

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Replying to lionofludesch:
Caroline
By accountantccole
05th May 2022 11:58

Plus it creates a fee expectation for when their business increases in size?

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ghm
By TaxTeddy
05th May 2022 11:56

Could be that the firm who quoted may not want this type of work so are adopting a 'minimum fee' approach. Or, as zeebaa says, they may know him for being a PITA.

On the face of it -it seems about 60% above what we might charge.

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By williams lester accountants
05th May 2022 12:08

For self employed set of accounts, plus tax return, we would be charging a minimum of £300+VAT, dependant on what the records are like, how we can tax plan, how the records are kept and obviously with one eye on MTD……

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By Winnie Wiggleroom
05th May 2022 13:07

£300 ish probably depending on whether we like him/her or not

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By Paul Crowley
05th May 2022 13:18

Firms are different
I have a building on a main road with all those related costs
We have a minimum fee of £250 plus VAT for anything
A few legacy clients are lower
Self employed start point would be higher

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Giraffe
By Luke
05th May 2022 13:35

Probably £250-300+VAT.

If I was fairly sure he would give me everything neatly that matched up with no chasing and not be a PITA then maybe £200+VAT.

£150+VAT is pretty low I think.

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By JD
05th May 2022 13:46

Sounds sensible to me - It is quite reasonable planning for any firm engaging this sort of client now to do so under their MTD solution of choice, rather than have the problem of converting the client and increasing price later.

MTD will lead to a significant increase in cost. IMHV it is far better to deal with it at the outset of the engagement now. Anybody pricing cheaply now will create a real problem for themselves in a couple of years time.

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By ireallyshouldknowthisbut
05th May 2022 13:50

I would not quote under £300+VAT for a sole trader, but I might end up doing it at that price for a while. I have a few we do at £250+VAT which is our "starting price" anyhow as I find the 'simple' SA returns tend to be fine for most of the time but 20-30% of them end up burning time some way or the other during the year so you have to build in quite a bit of extra. Those "quick" IHT questions for example, or HMRC messes need clearing up and of course the endless "is my tax code right?" questions form anyone in the £90-£130k income zone. But £600+VAT, not unless its a proper business. I do quite a few for £400-500 where its all well controlled and its just a cashbook in excel and no VAT or anything to worry about.

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Replying to ireallyshouldknowthisbut:
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By JD
05th May 2022 14:27

Similiar of extising clients, but do you plan to keep it at that level when it comes to MTD.

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Replying to JD:
By ireallyshouldknowthisbut
05th May 2022 14:38

We will be keeping well out of MTD.

If it really does happen for these types of clients (who knows) I was planning to find someone to bang them in on the cheap direct with the client and us keep well out of it. Its 'cheap is best' garbage data with no functional purpose, so why waste good quality accounts staff on that. Its where outsourcing works as you don't care about it.

if we did it it would be minimum £400+VAT on top of the normal fee even if we give it minimum scrutiny. Its just not going to fly commercially on our charge out rates and I would have to hire someone to do it and then sit around bored for 2/3rds of the time.

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By andrew55
05th May 2022 14:34

I'd quote £250+VAT for a job like this but do a fair few legacy ones for less. £600 is a bit punchy but I've seen far higher.....

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By DKB-Sheffield
05th May 2022 14:43

Would I quote a new client £150 for an SE tax return? Probably not.

Do I think £600 is excessive? I can't answer as I don't know what services the client received.

How much would I charge? £200 (and above) depending on what is actually being provided!

Would I be sceptical of this client? More than likely.

Firstly, and ignoring the work required for SE for the time being, £150 for a new client sounds low. Aside from AML, engagement letters, general onboarding/ authorisations etc., there is the matter of MTD. This will bring some costs, and it may be very difficult to significantly up your fee to cover that in 2 years time. All my new clients are now put on some type of software from year 1 (not all cloud, but all hopefully compliant) and are encouraged to have some form of quarterly update.

I also (generally) spend upwards of 8 hours per annum 'advising' new clients (anything from complex tax matters to spending an hour on the phone discussing the impact of a 0.25% interest rate increase on their existing £10K overdraft!). New clients (particularly) won't entertain additional charges for this ("My old accountant never charged" etc.)

On SE... your mention of 'invoices and expenses' suggests the client is not providing trading accounts that can 'simply' be transposed to the SATR. This would suggest a level of transactional checking/ writing up. FWIW don't believe ANY sole trader issues 12 invoices and only has 8 expenses in a year! If that is what they've 'told' you, I'd think again. They've either forgotten to mention their phone contract, their monthly subscriptions, the 50 'personal' transactions the lumped together and called 'wages' OR they are signigicantly under-declaring expenditure and are missing out on relief!

In addition, a client with 12 sales is potentially reliant on additional income. Maybe employment, maybe pensions (there's often more than 1), maybe 20 savings accounts paying interest, or maybe they have property income (which incidentally may only have 12 sales and 8 expenses in a year).

I'd be very hesitant to put a fee quote in without knowing what the client *thinks* is included. I'd provide a fee range estimate and include that range in the LOE. I'd also try to find out a little more when requesting Professional Clearance (it may well prove fruitless but if asked, I'd more than happily confirm an overview of work I actually performed for an ex client).

The big "no no"s... don't tell the client they've been overpaying, don't promise to undercut the previous accountant by x%, and don't get drawn into any ex-accountant vs client wrangles. All 3 have the potential to negatively impact you!

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By Accountingfirms.co.uk
05th May 2022 15:38

Always worth checking on www.accountingfirms.co.uk, it allows you to compare the fee based on location, qualification experience & much more.

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Replying to Accountingfirms.co.uk:
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By Leywood
05th May 2022 18:44

Waste of time

I tried 3 different queries and they all came back with ''The form was unable to submit. Please contact the site administrator.''

That looks even worse than Bark

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Replying to Leywood:
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By Accountingfirms.co.uk
05th May 2022 22:01

Could you please share screenshot at [email protected] so we can see where the issue is? All the forms are working on the website.

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Replying to Leywood:
ALISK
By atleastisoundknowledgable...
06th May 2022 00:22

Snap

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Replying to atleastisoundknowledgable...:
Giraffe
By Luke
06th May 2022 20:23

Snap

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By HiddenAccountant
05th May 2022 16:02

As you have clarified it's self employed, the most straightforward ones would be £350.

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Replying to HiddenAccountant:
Red Leader
By Red Leader
05th May 2022 16:22

HiddenAccountant wrote:

As you have clarified it's self employed, the most straightforward ones would be £350.

Yes, this is about what I would quote.
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ALISK
By atleastisoundknowledgable...
06th May 2022 00:19

If literally the only thing to be reported was s/e & we were given a list of 12 sales and 8 expenses, I’d charge £150 (TBH or even £100 if I’d had a client loss that day). But I know that I dont charge enough, so that should probably be £200.

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Replying to atleastisoundknowledgable...:
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By meadowsaw227
06th May 2022 12:09

I think you would have to be quite desperate to even consider taking on a new s/e client for only £100 to £150

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Replying to atleastisoundknowledgable...:
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By DKB-Sheffield
06th May 2022 12:43

I don't disagree with the methodology you are applying (minimum fees are subjective, location-based, and dependent on capacity, overheads etc.).

I would however question ANY client who suggests they are purely self-employed, yet can operate ANY business with 8 expenses per annum! They either have other income (S/E being a side-hustle),or they have severely underestimated the number of transactions! Caution would suggests there is much more to the client than they're letting on - which may explain the previous £600 fee. Problem is, these things only tend to come to light AFTER engagement, and once work commences.

The other issue... the client has moved once, they may be fickle and move again. Absorbing all the onboarding 'costs' in year 1, in the hope you will reap the rewards in year 2 may be ill-advised.

For that reason, I'd never seek to offer a 'minimum fee' to a new client... particularly one I have doubts about (i.e. 12 invoices 8 expenses).

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By ourpetsheadsarefallingoff
10th May 2022 09:39

Depends on what those 20 items are. £295 + VAT is our starting fee which we would charge for a P60 + dividends return. If it's sole trader or rental accounts, I would start from £350 + VAT assuming the client provides total figures.

I've only charged over £500 for a return in a few cases - either for complex returns or where I suspect the client might be a bit more trouble than usual.

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By Rod Wilson
10th May 2022 09:58

I had just such an enquiry last week. Self employed, "very low income"" looking for a new accountant". They provided no information about what records they kept. I quoted from £600 including VAT because it looked like they were price shopping. I guessed right because we never heard another word, not even thank you for your quote.

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By ianthetaxman
10th May 2022 10:01

This type of query will to a degree come down the the practice structure. Firms will have different degrees of overheads to cover so charge-out rates will be set to accommodate the usual three way split of wages/other expenses/profit.

Asking what one firm might charge compared to another doesn't really give the answer you're looking for. What you need to look at is how long it's all going to take.

How long will it take to gather the info and then prepare the return and the I & E summary. Do you do a letter explaining everything or just tell them a figure and where to sign? What review processes and checklists do you use (possibly to comply with your PI cover/professional body requirements, or because you want to make sure another set of eyes has sense checked it if nothing else) do you employ before issuing the return?

There will be other time costs as we all know, so if you factor in all of these elements, how long does it take? Then apply your hourly rate and see what the answer is.

I appreciate this may not sit well for those who don't operate on an hourly rate basis, and I don't want to open up the old chestnut of whether you should have one or not, but with a question like this, surely the only way to know what your pricing structure is would be to break down the elements of time required.

Otherwise you run the risk of guessing at a price which is wrong, with no basis on which to consider future work, or to begin to build some sort of recognisable format.

We are a medium sized firm and I'd say this sort of job would probably be charged at between £500 - £700 plus VAT depending on the quality of the info provide. For that, the job is prepared, reviewed, queries dealt with, sent to client with a detailed covering letter, and then submitted to HMRC.

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accountant in london
By Accountant in London
10th May 2022 10:55

We deal with a lot of clients with non-dom status, remittance basis, dual tax residency, offshore trusts distributions, etc.

None are self-employed. There is Uk source income like rental income, capital gains, investments etc.

Minimum fee is £450 + VAT
then staggered depending on the complexities to (£600, £750, and £900) + VAT

The hourly rate for complex work is higher but we still charge £150 + VAT ph, which is at the reasonable end of the fees that big firms charge.

For your type of client, I would still charge £450 + VAT as a minimum and with Self-employment, they do get to £600 + VAT in this regard.

I don't look at how quickly the work can be done, but how much skill goes into it. Yes, you might say it's just filling in a few boxes in the return, but it's the knowledge of which boxes to fill in that matters...

I had a plumber come and turn something on my boiler - took him 2 mins to see the issue. His minimum rate was £75. I paid that because it's his skill that matters not the 2 mins he spent to find out the issue.

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Replying to Accountant in London:
paddle steamer
By DJKL
10th May 2022 11:10

Rather than skill you could also consider risk, there is probably more risk doing a sole trader's accounts than in say punching in dividends to a tax return.

(I remember reading years ago that more PII claims involve not managing losses correctly/making appropriate claims etc than any single other issue)

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Replying to DJKL:
accountant in london
By Accountant in London
10th May 2022 11:17

Yes of course, risk too... thanks for adding that.

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Replying to Accountant in London:
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By Hugo Fair
10th May 2022 11:10

Fine (re the story of the plumber), but you're not merely looking at "how much skill goes into it" ... you are, however subconsciously, making a value judgement.
You have deemed £75 to solve a problem as 'good value'.

But if the plumber had said 'it's a big house so potentially loads of problems - let's say minimum of £750' (and still taken 2 minutes to fix the issue) ... would you still be happy?

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Replying to Hugo Fair:
accountant in london
By Accountant in London
10th May 2022 11:18

Well, it's a problem with the boiler - nothing to do with the house, a bigger house may have 2 boilers. So I did know what was the 'scope' of his work.

Builders on the other hand are a different story!

The plumber example is just an example - it may not be the perfect one.

Also its not just skill - loads go into it. But skill is on the top.

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By Arcadia
10th May 2022 11:09

Firms other than sole practitioners have to build in review time.

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By julianansell.hotmail
10th May 2022 11:33

Some years ago I had a dent knocked out on the wing of my old banger. The charge was £40 from a one person business. I asked why it was so high for a few minutes work. The bill was then broken down for me.
Knocking out dent £5.00
Knowing where to knock £35
My advice to any one starting up in business is never to under-price yourself to get the job. It is simply not worth it in the long run.

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By eppingaccountant
10th May 2022 15:09

From the information the OP has supplied, it is hard to say. About 20 items....how many sections/supplementary pages of the Return does this affect eg is it 20 dividends from plcs or various income sources such as Employment, Self Employment, UK rental income, Foreign income etc etc. Need more details before quoting. Surely if a new client came to any accountant reading this and said I have a straightforward Return that comprises 20 or so items, your next question would be the one I have asked in the previous sentences, before being able to give a meaningful quote. But definitely higher than £150 plus VAT!

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