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Is my only option to winge?

Is my only option to winge?

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This is probably me winging but......

Being tax trained surverys we deal with capital allowances claims on commercial property and not accountancy work. As part of our process we try and give clients a pre-estimate of their likely tax benefit by estimating the likely capital allwoances we will identify for the "fixtures" in any given property. We (like many other companies which do what we do) have become pretty good with these pre-survey estimates.

However what we are finding is that some companies in our market deliberately inflate these pre-contract estimates giving the client the impression they will get a much bigger tax benefit going with them rather than us or any of the other ethical competitors who have provided estimates. This becomes very frustrating becasue you know if the client falls for this they will ultimately be disappointed but by that time the rival company has done the work and have moved onto their next victim!

My question is what would you do in repsonse to this type of tactic? It is always the same one or two companies who employ this type of behaviour and I try hard not to discredit them to the potential client but it is getting so common it is difficult not to pass an opinion. I do also try and concentrate on the positives of using ourselves.

  

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27th Mar 2014 11:47

Your success %

What's your success percentage?

How close do you get to your initial estimate?  I'm assuming it's fairly close?

i.e. initial estimate £10k, actual values gained = £9k percentage = 90%

Then ask the prospect to get the same figure from the competitor

The competitor will either

a) Not be able to produce the figure

b) Have a much lower figure than you, or

c) Lie

Then guarantee that'll you'll be within 90% (or whatever) of your initial estimate

Can the competitor guarantee their figure (especially if they fall into the third answer pot)

 

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By plummy1
to hiu612
27th Mar 2014 12:05

Good Point

Thanks Stewie.

What we could offer is a reduced fee if we have over-estimated provided the client is found to have a full entitlement to claim of course. Your right if the client asks the other providers to do the same it would make the competition think twice before providing over-estimates. Will give that some more thought but thanks for the suggestion.

Regards John. 

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27th Mar 2014 12:08

Just like the contractor accountants "take home" calculators

The exact same thing happens with the so-called "specailist" contractor accountants who have online calculators showing the "take home" pay based on their hourly/day rate etc.

Inevitably, they come to some pretty high "take home" percentages, but often based on part of that being meals/travel reclaims, or other expenses such as equipment, insurance, telephone etc (which aren't really "take home" are they as you also have to pay out the money).

I've had far too many conversations with clients who are led to think that different accountants can do different things.  Legally, they can't - the same rules apply for everyone and they're just manipulating their online calculators to make themselves look better.

Not to mention to less moral firms who allow clients to claim for expenses which they've never incurred, such as round sums for subsistence etc., by saying the dispensation means they don't need reporting and are tax free - yes, for the company, but there's still the need for the individual to have incurred an expense to be able to claim the round sums which are merely to reduce paperwork, not to give tax-free money.  Funny how some of the "specialists" don't mention that!

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27th Mar 2014 15:10

.

@plummy, I know from your other posts you are selling credibility and distancing yourself from "flybynights" which blight your sector. 

ISome basic, since when did a heating system cost £50k for your property? We both know it only cost £20k, so I am not going to try and tell you we can get £50k can go along way.

I do something similar on price. Client says "but down the road its £500, you want £750".  I say "but we do it properly, and don't sub it to a junior, and by doing so we hope to give you a much better services and save you more than £250 in tax, but if 'cheap is best' go down the road. Be more than happy to speak to you next year......"  

Of course i have NO idea if they do sub it to a junior etc, but it works :)

 

But fundamentally if you do a good job you get lots of referrals. I barely advertise now, nearly everything we get is a referral.

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By plummy1
01st Apr 2014 10:17

Thanks

It seems that others face the same issues in different areas of accountancy and taxation so obviously not unique to our our speciality. Better to be truthful and not get the work than have to be underhand. I'll probably never be rich but at least I'll be able to sleep at night. 

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