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Should I charge for Accountant's reference?

Should I charge for Accountant's reference?

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I would be gratedful for opinions/practice on charging for requests for Accountant's reference  from lettings agents, banks, Home Office etc. This is obviously references for clients.

I have not covered this aspect in my enagagement letter.

My thinking is to charge £25+VAT as admin fee. Would this be reasonable? Should I charge at all? Charge more?



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19th Apr 2011 10:06


If its an established client we wouldnt dream of charging for a "one off" 5 minute letter.  Do you charge for every 'phone call etc ? Whats the difference, its 5 minutes work at most.

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19th Apr 2011 10:14

It depends

If it is a simple letter then we don't charge.

If we receive a detailed form for completion then we make a nominal charge, and the client is informed of this in advance, and their approval obtained for the charge and the handover of the information.

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19th Apr 2011 10:25

£100 by one accountant

Did a google search on this - clients perspective

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By vince8
19th Apr 2011 10:33

Never - I second that

If its done in the correct way its not worth the paper its written on anyway.

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19th Apr 2011 11:00

None here

 All part of the deal!

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19th Apr 2011 11:41


Our policy is not to charge and to state that we have provided the information without charge in the reference . We prefer to charge a higher base fee and include an allowance for a few small extras . However, what suits our clients may not suit yours.




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19th Apr 2011 12:47

This is how I intend to go

Thanks for the feedback that I found helpful.

In my opinion this is extra work and there needs to be a fee for this. So what I will do is with all existing clients follow Shirely's approach - ie only charge if it is time consuming.

With all new clients with the Engagement letter, I will includes a price list (menu) for extras. This list will grow as I will come across more and more extras. This way clients would know before they sign with me. It will also include work like changing registered office address, shareholdings, Director's address etc. Annual return fee (£50+VAT). I will also include fee protection insurance in this list.

The standard fee would be for known compliance work.

For the straightforward reference, for example, my fee would be £50+VAT.

If the client is not happy they will not signup with me. The key would to let the client know well before the situation arises.

Any views on my new approach?

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19th Apr 2011 21:42


I personally dont charge for such service been it letting agent or mortgage reference, but i let the client know that i should be charging them, however, as a gesture of goodwill, i will waive it. It works a trick all the time. Like others has mentioned, if it is more detailed reference then i charge £30 plus VAT with the client consent.

If you are thinking of charging £50 plus VAT to file annual return which only cost £14 now, i cant see how your clients will be happy paying that much. If they are now, wait till they found out how much you have been charging them and they will be out like a shot!

I have got little fees like that covered in the engagement letter which covers use of our office for registered address, annual return etc

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19th Apr 2011 21:59


Yes, I charge and to date all clients have happily paid it.  They are more bothered that I reply quickly so that they can move in as soon as possible.

Make sure you include appropriate disclaimers though as you don't want to be on the hook should the client not pay their rent.

BTW, I don't quote fees in the engagement letter as I increase my fees each year (in line with inflation) so everything would soon be out of date.

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19th Apr 2011 22:36

Sometimes more can be less -

Is it really worth the hassle of sending out, recording, and chasing up, any bill under say £100 ?

I've really got better things to do with my time than mess about generating needless work oby raising invoices for silly little jobs that really should all be part and parcel of the package we offer clients.  Just build into every fee an allowance for the usual "odds & sods" such as references, phone calls, etc etc. 

Start hitting clients with extras all the time and they will quickly conclude that you're ripping them off and they'll move. 


I recall a client we picked up many years ago. He'd 'phoned his accountant on Christmas eve to say he & some other local business owners would be in the pub next door to his accountant's offices if the accountant would like to join them.  The accountant declined the invitation (idiot). 

The next bill the chap received included a £10 charge "for taking your call on 24th Dec".  The accountant lost a client instantly, and lost a lot of good recommendations too - I know because we got the client and all his mates too. In fact that £10 bill lost him around £10k a year in recurring fees.    

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20th Apr 2011 12:12

ACCA guidance is not to charge.

The ACCA general practice and procedures manual states: "To avoid the possibility of an implied contract, accountants should not charge any additional fees for a reference and they should disclaim, in writing, any liability for providing the reference."

I reviewed all this a few months back, there is more on the website, but I haven't managed to find it.

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20th Apr 2011 12:53

The annual "one off"

Most clients have some small "one off" issue most years.  Whether it be an accountants certificate, a run of incorrect PAYE codes, lost cheques, weird payslips, incorrect penalties, an oddball accounting issue, telephone queries about VAT on something out of the norm,  finding an adjustment after the accounts have been finalised, general HMRC oddities, telephone calls that start "a bloke in my pub/golf club/lodge told me...."  etc etc.  Life's like that, so best factor in an extra hour or so in every fee quote to cover them.

As CD said you don't want to be billing fiddly bits as you will find that they occur on most sizable jobs most years to some extent.

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20th Apr 2011 13:43

passport forms

Do other accountants charge for signing passport applications as well? I never do, even if it's a client and 3/4 family members. Some of them give my wife a bottle of wine, though, and no ,she doesn't work for me ,so it's not a job-related benefit. At least that's my opinion.

As C-D says, can people really be bothered to raise a bill for £25?


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20th Apr 2011 13:58

existing guidance on accountant's reference query

The ICAEW audit and assurance faculty has guidance in this area (Audit 02/01 Requests for references on clients' financial status and their ability to service loans). If you are an ICAEW member, then you will be able to access it at

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20th Apr 2011 14:43


The ICAEW audit and assurance faculty has guidance in this area.............. Posted by sumitashah on Wed, 20/04/2011 - 13:58


Thats the point - it's only "guidance" - and lets face it, the people who write it have no experience of working in the real world with real clients and have never built up a practice from nothing.


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By chatman
20th Apr 2011 15:14

I would charge a minimum of £50

When you set your fees, you do it with the idea of making a certain amount of profit.  If you don't charge for things like references, you build them into your other costs, consciously or not. If you build them into your other costs and then the client does not need them in a year, then they have paid for something they did not receive.

I do not build them into my other costs, so I bill them separately. In any case, the cost is never just five minutes and can sometimes be followed up by requests for further information by mortgage companies or whoever. 

I don't charge for telephone enquiries unless I end up doing a lot of extra work, simply because it is more hassle than it is worth.

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20th Apr 2011 16:45

guidance or intuition?

Providing a client reference is a high risk activity and it is not an area from which one can profit. Some loan arrangers appear to word their questionaires in a way to catch the unwary, others that I have come across are better and include appropriate disclaimers. The guidance provided by the ACCA (if I could find it on their website) is good and written to help avoid the pitfalls that have caught out many in the past.

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20th Apr 2011 17:30

All inclusive

I charge a higher annual fee to include little things like this. Most clients need a little one-off "extra" like this most years. If they turn out to be consistently more needy than most then I would increase my base fee in future years. If they are less needy than average then this is also considered when reviewing fees.

I'm a sole practitioner and don't have time to mess around with raising small invoices and chasing payments.

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20th Apr 2011 18:48

Charging is the least of your problems.
Whether you charge for giving a reference or not is immaterial as is the amount you might charge if you decide to do so.
What you need to think about is what you might put in the reference. Whether or not you make a charge makes no difference if, at a later date, the person who relies on the reference send you a claim because what you wrote amounts to a negligent mis-statement at common law.
As I said, it makes no difference whether you charge for a reference or supply one voluntarily: Chaudry v Prabhakar [1989] 1 WLR 29. The same applies if you inadvertedly say something (accountancy advice, maybe)to someone at a social event and that person then relies upon it and subsequently suffers a loss.
My next door neighbour (financial services business) supplied a reference for one of his employees who moved to a new employee. The employee didn't get the job as a result of the contents of the reference that was sent. My neighbour was sued for one and half million Pounds. Fortunately, his barrister was a part-time judge and represented him well by winning the case but at a cost of some £80,000. During the year in which it took for the case to come to court, my neighbour lost two stones in weight. Keep this in mind when you are asked for a reference or write one!

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20th Apr 2011 20:49

Vaughan Blake and lawmaniz make very good points.

@lawmaniz: (correct me if I'm wrong) I think the recommended approach is to supply only historical facts rather than future opinions. For example:

"John Smith's tax return for the year ended 5 April 2010 shows self employment income of £x. In accordance with our normal practice for all clients, we can make no assessment of our client’s continuing income or future outgoings. Whilst the information provided above is believed to be true, it is provided without acceptance by ourselves of any responsibility whatsoever, and any use you wish to make of the information is, therefore, entirely at your own risk."


"John Smith worked at our company from 6 June 1944 to 6 May 2005. His final salary was £1 6s 2d per week and his job title was payroll supervisor." It would be interesting to know what the flaw was in the reference that was the subject of the lawsuit.

@Vaughan Blake: on average, there are always going to be some odds and ends that crop up. You give a good list and that's exactly what happens in practice. The mistake often made is to think "dead simple tax return, it won't take long" but forgetting that there's often more work in the full 12 month period between tax returns.

@FT: it just doesn't seem worth rasing an invoice for £25 (as CD says), if you want to charge this, just add it to the next bill.

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By Lahtac
20th Apr 2011 22:55

accountants reference

In setting an annual fee quote for a client we tend to include a buffer for routine corresondence (to include reference letters etc) and routine once off meetings (where there are 2 or more meetingson a single client matter we will charge a fee) so this should cover your time. If you charge a rock bottom fee you need to explain at the outset that all additional bits of work are extras and are billeable (thnk of Ryanair versus BMI or BA). 

As regards drafting a reference letter for a client such a letter should include a disclaimer of responsibility etc or you could be exposed to being sued by a Bank or landlord. By putting in a disclaimer it is propably unfair to charge the client for such a letter.       

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20th Apr 2011 23:20



You vastly overstate the case. Providing it is made clear that all figures are based upon information supplied and explanations given by the client - and, that all forecasts are similarly based up information given by the client upon whose information you have relied, then no legal liability arises.


Your neighbours situation appears to have been a totally differet kettle of fish.  Giving a negative reference is a serious matter as it could be seen as libelous (to which there are very limited defences).  Or to put it simply, if you want to write a detrimental reference make sure that you can -

a) Prove the truth of every detrimental comment.

b) Prove that there was a genuine and overriding reason for disclosing it to the other party. (for example, disclosing the fact that someone applying for the position of school teacher is a convicted paedophile would be a reason for saying so - but disclosing the same fact if they had applied for a job as a lighthouse keeper would not).

The rule is simple - if you cant give a positive reference - dont give one at all.  Your neighbour appears to have been very lucky.



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21st Apr 2011 08:28

Raising invoices

It takes me less than 1 minute to raise an invoice to a client and email it to him - so its no hassle really.  Having said that, if the fee is less than £50 I just let the WIP build up and add it to the next sizeable bill.

As others have said, I build into my fee quote a buffer for ad hoc queries, but any written advice / references etc are billed separately.

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21st Apr 2011 09:09

I used on advice of 2020 group

I used to charge £75 for a mortgage reference on the advice of 202 membership group.

However it rubbed a few people up the wrong way so I stopped.

Interestingly on the link someone posted above to the other forum, there wer some posts in support of the accountant.

My thoughts are that if you are a true advocate of value pricing, you will charge a fee for this sort of work.

Perhaps the reaction of some of my clients show the inherent problems in value pricing.

The one exception I would make is with people with substantial buy-to-let portfolios, if they are in an aquisitive phase you tend to end up doing references every week, which can take up some time.

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21st Apr 2011 13:39

To Red Leader and the Welsh Dragon: the point of contention in the reference was the disclosure that the employee who was employed in the particular financial services business had been disciplined for an act or acts of sex discrimination. For the former employer not to mention this might have exposed him to liability from the new employer as it was/is a material fact. However, mentioning it exposed the employer to a legal claim but, as the Welsh Dragon rightly says, as it was true and not an untrue or malicious statement, the employer was clear by the Court of liability - but only after a great deal of expense and worry. As members will know, it is obligatory for an employer to supply a reference for an employee moving to a new employer in the financial services industry.

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21st Apr 2011 15:50

Economies of scale

If you do regular references for the same client for his buy to let portfolio is it not just a cut n paste job on the first letter?

In fact if you use the standard letter as per ICAEW instructions each letter is little more than this anyway.  Set up one template for the self employed and another for the director/shareholder.  Slot in the address, figures etc and Bob's your builder.

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