It really is starting to become a race to the bottom. "Accountants" on people per hour offering self assessments for £55. How is that even possible.
Has anyone used people per hour with any success?
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its always been like that. Local bookkeeper near me does them for about £50 on top of the bookkeeping (which is not very good).
from what I can work out (a couple of tradespeople I use use her) they just types in the numbers and presses send in the client's HMRC log in. Easy innit!
It really is starting to become a race to the bottom. "Accountants" on people per hour offering self assessments for £55. How is that even possible.
Only if you try to swim in the sediment at the bottom of the fish pond.
Easy
No dealing with HMRC
No AML
No PII
No CPD
No advice given
No software fees
Zero costs
And definitely no guarantees
Hence no comebacks
And probably no income tax to pay
In January I was getting a lot of adverts in my FB feed from an outfit Taxscouts who quote a fixed fee of £119 all in for SA returns, regardless of complexity. It seems that they operate a platform that links you up with an apparently qualified UK accountant who will file your return (there is a link to sign up as a partner). Thinking about this £20 of that is VAT, the platform I expect will want a £50 cut, so that leaves £50 fee for the accountant regardless of what a ball ache job it is. I know that these operations rely heavily on automation, and the client doing much of the work themselves, but this is silly cheap and I wondered if this is the way things are going. They seem to have significant VC backing so someone thinks the model is viable.
It is the way it seems to be going.
Not helped by HMRC dumbing it down saying you just press a button every quarter under MTD.
But HMRC will reap what they sow with scores of people using mickey mouse free software filing garbage data to HMRC or dropping out as it's too hard.
My Mantra: Quality... not price! And if price is the sole motivator for a client, they're not the client for me!
PeoplePerHour, Freelancer, Upwork, Fiverr etc... are all about getting something done on the cheap. However, there are some that use the sites to find quality. Few and far between, but I've picked up some in the past.
If you're going to use any freelancing site, don't try to compete on price! Be selective and don't go after every job. Find the hidden gems. I picked up a 'small payroll job' in 2011... they're now my largest client!
I no longer 'use' any site but, do get the odd 'invite'. Occassionally, they may be worth a second look. I just don't need it at the mo!
As for whether £55 for an SATR is possible? Define SATR!
- Could one feasibly file a core SATR for £55... possibly.
- Would that cover AML, engagement etc... probably not, but many won't be supervised for AML, or a member of a PB.
- Would that cover Self Employment, Partnership... bookkeeping/ writing up... tax advice...? In the UK... probably not, in Indua, Philippines... probably!
I'll admit to doing one SATR each year for £50.
Not because I'm cheap, not because I don't have, CP, AML, Practice Certificate, Software, office and staff costs ..etc.
The return was for an 84 year old who had a state pension and a small private pension. I offered to do this the first year for ZERO as I believed he shouldn't be completing a return and expected HMRC to agree.
Unfortunately the client was "old school" and said "nay Lad I need to pay you so I know it's being done right".
£50 was the lowest he'd accept as me being paid for "doing it right".
6 years on I was still doing the returns for the same price and HMRC still insisting on him needing one. It was a pleasure dealing with this client each year and the work involved was negligible but it helped him deal with SA each year without worry.
No I couldn't run my business on that model but I could do a kindness for a gentleman (who sadly past away last year, and will be missed by us as a nice client).
I admit also having clients in a similar boat... and with similar fees. They've been with me for years. It's a kindness. The fees are irrelevant. They can't afford to pay more - but every year they try to up the price and I refuse! It's a pleasure to act for them.
The crux of the issue... could I afford to advertise my services to an *unknown* potential client, satisfy all the relevant checks, act professionally, and cover costs (let alone make a profit) for £55 - less the platform fee of 20% or whatever it is? Nah! I'd be much better off getting a paper round!
@sanone, we have several clients on cheap deal as they are lovely, don't take long and usually flat broke. I had to stop taking on Artists in the early days ( I collected quite a few) as I had so many bad bits of art in the house taken in exchange!
The elderly but loaded ones get charged properly.
My outlook is
Do no harm
Do good when you can
Help if you can when you can
Charity begins at home , but it's also in our offices.
Maybe your descendants will find that they have the 22nd century equivalents of a Matisse or Picasso?
But the art may be worth something in the future.
I have an oil my father accepted for a legal fee in the 60s that may now be creeping up towards the £1,000 mark . (One by same artist of same scene sold for £500 in New York about ten years ago and my canvas is nearly double the size of the one that sold)
Basically you need to take their art then start assassinating the artists. (usually worth more once they are dead)
I worked for TaxScouts (£119 to the end client) and my worst experience was £50 for a tax return which took around 5 hours. Around 10% of my TS clients earned more than £200,000. Some returns did take less than 30 minutes; the average was probably 2 hours. I no longer work for TaxScouts due to the low hourly rates, but it was a fascinating experience, and the platform was very good (P60s uploaded in the employment section, dividend vouchers in the dividend section etc.).
Yes, I carried out full AML check,, asked for professional clearance, and got LoEs in place, and am fully insured with a PC from the ICAEW.
I think it is interesting concept and would love to know how much profit they make!
Individuals earning over £200,000 are the type of clients that could really do with tax advice to see if anything can be saved, and I find it interesting that they use this type of service. I suppose those kind of individuals are the time poor clients who would normally do it themselves, are happy to pay £119, but no more, but don't then get advice as to how to save tax!
Thanks for sharing your experience on this.
P60 + child benefits + a smidgeon of dividends typically.
I'm not sure what tax advice you can give to someone with a P60 north of the pension allowance fully tapered threshold for the past 4 years. Work from home allowance?
Those fees won't even cover anywhere near my time processing the AML checks on sign up, and the annual reviews. No thanks.
This level of work has been brewing for a very long time and it doesn't stop there and will get worse, much worse
Given that a large proportion of clientele/public want everything as cheap as possible, particularly for what they deem to be imposed costs of compliance for which they have little real interest nor care, the market for these "professional players" is buoyant. They can remain anonymous, carry little or no responsibility and its easy money, albeit very cheap.
Automation and the general digitalisation of the profession and general compliance has led to some very complacent, almost careless, practices both from the professional and the client, with the professional relying on the information provided, (often knowingly rubbish and without corroboration), as a defence against potential problems.
MTDfITSA will exacerbate the problem and will result in many clients who will struggle to appoint good professionals and who will end up with an agent from "down the pub".
I have begun disengaging from clients that take no responsibility, are careless and are generally a PITA because the future does not bode well for our relationship and more importantly my well being!
An interesting post. These types of 'tax agents' (if you can call them that!) have always been around, but now some of them are VC backed etc. so expect more of this type of thing in the future.
My concern is that the individuals that use them won't ever actually receive any advice! I use a tax return as a way into an individuals tax affairs. Give advice to save tax, and the branch into their wider affairs to see what else can be achieved. This types of outfits will never do this, so it will be interesting to see if any PI claims arise as a result of something not happening.
I am out of this profession if every client wanting a SATR paid £55 even £119, my gardener earns more per hour!
These providers can only really handle the simplest of returns, so my advice is steer clear of getting into a price war, these sorts of clients are not worth having.
And if a client mentions how cheap other accountants are, you know where they can go!
Quickfile have a banner saying "year end accounts from £80". Digging a little deeper, there is a questionnaire to fill out, which then gets sent to accountants who send quotes. No idea where the accountants are based. I assume that this is only the stat accounts and doesn't cover SA / CT returns...
Lots of 3rd world well qualified people using full automation with low cost (WFH?). And probably no worries about practice cert, AML er. Etc.
You can't compete with them and that is what a lot of people is all they need.
It's not my market and would not compete with them.
Accountingweb is assisting this race to the bottom. Everyone expected to give their advice for free.
