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How to make more from Self Assessment tax returns

11th Jun 2024
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Coconut’s simple bookkeeping and tax app is specifically designed for sole traders, helping them...
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Many accountants will have read Molly Macfarlane’s piece “How much are you charging for a tax return?” (AccountingWEB 20 May) with great interest. It summarised an IRIS survey looking into accountants’ fees for a range of services, encouraging readers to share their views and consider their own prices.

According to the survey, 90% of accountants charge between £126 and £400 for a tax return, which is quite a price range. Other respondents charge between £400 and £600, while 1% charges more than £600 for a single tax return. The higher fees are obviously determined by many factors, including the complexity of the client’s tax affairs, as well as size of firm, location and the accountant’s level of expertise.

What’s a fair price for tax returns?

Quoted within the same piece, one AccountingWEB community member reported  seeing a service provider offering to complete Self Assessment tax returns for as little as £20 as a one-off special deal.

“If this is what the rest of you are charging, I tender my resignation with immediate effect, because I refuse to join this race to the poverty line,” he commented. Another, Cardiff-based accountant spoke of a fee of £75 for a “straightforward director’s return (PAYE plus dividends)”, with £360 for “straightforward self-employed accounts and tax return”.

Although another community member said they wouldn’t “take on any new client for less than £500 plus VAT”, most members were charging between £250 and £400 for a tax return. In more remote locations, accountants charge less, while many members all over the UK are not putting up their fees for long-standing clients, although they were still paying £250-£300 to have their tax returns completed.

Are you charging enough for your tax returns?

The figures above might confirm that your rates are towards the top end of the scale and you’re earning well from your tax return work. Happy days. Alternatively, you might suddenly be filled with the realisation that you’ve been undercharging for your Self Assessment tax return work and you really do need to do something about it.

To win customers, some accountants set low fees (sometimes very low). The problem is, you later find yourself working very long hours with very little profit to show for it. And it can prove very tough to later increase your fees significantly, because clients have become used to “cheap-as-chips” rates, which means you could lose some, most or all of them. But, as you know, stay as you are and your business will become less profitable by the month, which isn’t sustainable. 

Sound knowledge of your clients and competitors is essential when pricing your services. You must know how much clients are prepared to pay for the services they need, as well as how much your competitors charge and what value they provide. If you lack that knowledge, before doing anything else – carry out some basic market research.

How to put up your prices

If your price increase is justifiable and seems reasonable to your clients, you’ll probably only lose the ones that you don’t really want. Others will appreciate why you’re putting up your prices and as long as you explain your reasons (not least the significantly increased costs that you’re having to pay), many will stay with you, providing they’re happy with your services and your price increase seems reasonable. Job done.

Obviously, caution is advised, because if you set your prices too high, you’ll inevitably lose customers – maybe more than your business can afford. This is where having a thorough knowledge of your market is vital. You might adopt a strategy of increasing your fees over two years rather than one.

Whatever rates you charge, obviously, you must minimise your costs to maximise your profits from Self Assessment tax returns. Technology is key if you want to be as productive and efficient as possible. Making sure that your clients are using good, cost-effective, easy-to-use accounting software gives them many benefits, while saving you lots of time and headaches when it comes to Self Assessment tax returns.

Earn much more from Self Assessment tax returns

There are apps that many accountants now use to make their lives much simpler and save time when completing client SA100s and supplementary pages. They can make a real time-saving difference, which can be especially welcome in the weeks leading up to the online filing deadline each January. Being able to get through Self Assessment tax returns in far less time, means you can take on more clients and get far greater returns from tax returns. How great would that be?

Brought to you by Coconut, the easy accounting app for sole traders, small landlord clients and their accountants. Many accountants already get their sole trader and landlord clients to use Coconut. Coconut accountant partners can also use award-winning tax return-filing solution GoSimpleTax for FREE as long as they have paying clients. Time, effort and money-saving GoSimpleTax is integrated with Coconut. Treat yourself to a FREE partner account or book a demo with our team, and see how both you and your clients could benefit.