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Self Assessment Tax Returns for £125

Is this a concern for accountants ?

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I was contacted today by a client who saw an advert on TV to file tax return for £125 (inc VAT) and wondered why it was cheap. I charge around double.  I expect I will get further inquires from clients querying our charges when they see such adverts.

The initial contact with the client is getting information through the website and then they are allocated a qualified UK accountant who will request more documents and information. They can file tax returns based on all types of income sources including CIS, landlords.

I am only slightly concerned as our number of  non director self assessment returns is quite small.  Though it must be a worry for accountancy practices that have a large number of self assessment tax returns to file.  I suspect many other companies will follow this model high volume and low margin,  Perhaps even outsourcing the tax returns to cheap labour countries like India for a bigger margin.

Replies (22)

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By Matrix
12th Jan 2021 13:22

I expect you have to complete an online form with all your figures already available. I can’t believe that you can send off documents and you are able to send info piecemeal and get a bespoke service.

I haven’t seen the ad but, no, I am not concerned.

Was the client after a reduction? Cheeky.

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Replying to Matrix:
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By sanjay100
12th Jan 2021 17:03

I saw one ad for £119 but not for £125. I took a look at the website and went through the process and it is quite good once you put in the information in and make payment you get access to ACCA qualified accountant (from UK) and they will then ask for more info/documents and file your tax return.

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Replying to sanjay100:
A Putey FACA
By Arthur Putey
12th Jan 2021 17:48

I posted about this the other week. The "certified accountant" who is signed up for the service will receive if they are VAT registed no more than £80 net once the platform has had its cut. Probably ok for tax shop franchisees to augment their walk in trade which is probably depleted due to lockdown, but you have to commit to a 48h turnround time which limits the number you can expect. And of course most of the demand is going to be last minute.

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Lone Wolf
By Lone_Wolf
12th Jan 2021 13:27

I'm not concerned. There will always be folk who drift towards what is cheaper, and really, that's not an ideal client.

As Matrix says, I suspect this will be an online form you fill in, and there is very little thought put into what is actually submitted. Merely a copy and paste job.

If the one paying for the service had a bit more savvy, they would probably realise they could do the exact same by submitting the return themselves to HMRC and save themselves the £125.

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By Duggimon
12th Jan 2021 13:39

You can commence worrying if your selling point to clients is being the cheapest they can find.

We like to think we're selling a valuable service at a fair price, which I suppose is what these budget outfits are doing as well. We're not selling the same service though, I don't just file tax returns, at a minimum I file accurate tax returns, and usually do considerably more, I would be surprised if for £125 they were hitting even that low initial bar.

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By ireallyshouldknowthisbut
12th Jan 2021 13:47

I have seen it. Given the advertising costs of running that campaign they must be making a pittance.

I also wonder what they mean by "qualified" exactly. First pass in AAT?

Classic "look ma no hands" filing.

Its no difference from what many bookkeepers seem to do, just slapping a few numbers in a tax return as clearly that is the main job. not working out what the numbers ought to be........we have someone in my village who does them for £50 and £150 for a sole trader. Good luck to 'em and their clients! I know as I have picked up work from them, all they do is copy the numbers the client gives into the return. Its an expensive typing service from what I can gather.

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Replying to ireallyshouldknowthisbut:
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By sanjay100
12th Jan 2021 17:39

What I have seen so far just going through the process it was CIMA and ACCA (both UK based). Looked up one guy and he had his own practice in London so they are subcontracting tax returns to other accountants maybe making a small margin on each tax return filed and relying on volume though heavy marketing. Their advert was pretty good.

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By Youareatit
12th Jan 2021 14:04

They will just have all the pita clients no one else wants.

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RLI
By lionofludesch
12th Jan 2021 14:23

More like low quality than low margin.

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By pauld
12th Jan 2021 15:43

As it can take around the same time as a kettle to boil to do a simple directors tax return, perhaps £125 is a fair price and you are overcharging, like many others

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By Matrix
12th Jan 2021 15:58

If you are only putting two figures on a tax return, maybe so. However if you are also advising the optimal salary and dividends to get to those two figures then a higher fee is justified.

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Replying to Matrix:
RLI
By lionofludesch
12th Jan 2021 16:11

OP says "They can file tax returns based on all types of income sources including CIS, landlords."

If there are genuinely two entries on the returns, I'd agree £125 is a decent fee, first year MLA stuff excepted. I'd throw in advice on optimal salaries and dividend policies. Two entries suggest that the advice would be pretty much "boiler plate" anyway. All you'd need to factor in would be the profits available.

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Replying to lionofludesch:
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By sanjay100
12th Jan 2021 17:15

Yes including taxi Drivers, Capital Gains etc still £125. Everything apart from Foreign pages and Residency Test. It even mentions Uber drivers on the website.

I wont mention the website as wouldn't want to give them free publicity.

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Replying to Matrix:
A Putey FACA
By Arthur Putey
12th Jan 2021 17:57

A tax return filing is a retrospective action. Dividends are already known, as are employment earnings. Of course you can advise them on how to do it this year, if that is what they are asking for.

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Replying to Arthur Putey:
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By Matrix
12th Jan 2021 18:22

I meant that if advice had already been provided on the optimal amounts during the year, not retrospectively, then a fee higher than £125 may be justified. Apologies if that was not clear.

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By Whatisname
12th Jan 2021 17:44

Haven’t seen these ads myself, but for a few years now a firm of accountants have been heavily advertising locally tax returns from £50. I don’t remember ever losing a client to them.

I noticed a new firm set up along the road where I live also matching this price. I’ve no idea what the taxpayer gets for this or how it might go up for more involved returns.

I’m just glad to be retired! Good luck to all those still working towards the Jan 31st deadline...

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Replying to Whatisname:
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By sanjay100
12th Jan 2021 18:03

This is advert on TV so something clients cannot miss and some will be intrigued like my client today and just question the huge difference.

I think some will use low prices to get them into the door then maybe charge more later or pick up more lucrative work later . Some will just outsource to cheap labour locations. There will be some unqualified where earning 5 times the minimum wage is decent knowing that the chance of any come back or repercussions is low.

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Replying to sanjay100:
RLI
By lionofludesch
12th Jan 2021 18:14

sanjay100 wrote:

This is advert on TV so something clients cannot miss and some will be intrigued like my client today and just question the huge difference.

Well, I've missed it. Don't folk just record stuff these days and fast forward through the adverts ? I certainly do.

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boxfile
By spilly
12th Jan 2021 18:50

There is another company that had a flyer inserted in the Sunday Times this week offering SA returns at £107.
I’ve just had a phone call from one of my pensioner clients asking if we will match this price. I’ve said not as his tax return is not straightforward, but I have a feeling that he may give it a go with them as he likes to ‘get a bargain’ (in his words).

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By bernard michael
13th Jan 2021 09:35

The introduction of SAR MTD should sort them out. Are they going to include in the price sorting out any HMRC enquiries??
I guess not and it'll be down to the rest of us to pick up the mess. "but of course at normal rates". We should look at it as a marketing tool taking the rubbish clients and leaving us the more interesting work

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By Rgab1947
13th Jan 2021 10:43

If working from home and you have simple yet effective software for submission to HMRC and which derives the data from website input direct (that is no transposing) getting say £80 net is a nice little earner.

1 hour per return for a £5,000 income you only work for 62.5 hrs in the month. Very little if any admin. No on-boarding.

Its the future I am afraid. CT and AP will go the same way.

In 5 years time the profession will be superfluous other than for die hard old style clients.

And if based in India or other low cost countries you will live like a king 9with a better climate!)

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Replying to Rgab1947:
Tornado
By Tornado
13th Jan 2021 13:18

I don't agree with this at all.

I have been around for a long time now and was preparing Accounts on personal computers 40 years ago (Auditman) and despite the claims at that time to the effect that you only required unskilled staff to enter the data, here I am still today using advanced technology but with many clients who require my assistance and expertise to deal with their Tax, Accounting and Associated, matter at rates that are a great deal more than £80.

One great lesson I learned is not to believe the hype, especially about IT, and use my own careful thought out judgement with a healthy scepticism of the apparent wonders of modern technology.

A human pandemic is one thing but an uncontrollable virus let loose on the internet is probably something more devastating and just waiting to happen.

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