miketombs
Member Since: 24th Jun 2009
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Mike Tombs is a Director of TLA Business Services, a firm of Chartered Management Accountants and Business Advisers based in Worcester and covering the West Midlands. Unlike most accountants in practice, he has spent the bulk of his career working in hands-on roles in a range of industries, including engineering, construction, manufacturing, the motor trade and mining. His work has taken him beyond the UK to South Africa, Zambia and Tanzania, and he has been involved in businesses of all sizes, from small family firms to large multinational corporations.
Mike is married with two sons, one working with him in the business and the other in the IT industry in Johannesburg.
My answers
It's February
This thread wouldn't have dragged on so long last month:-)
Easier if they are registered
Every year I get this uncomfortable feeling that we will have missed out a director's tax return because we never knew one was due and the individual just assumed we were dealing with it. Although we will be covered by our letter of engagement (or lack of one with the director!) there will doubtless be some lingering ill-will.
Ian - re your point about the rude comments, they aren't that common on this forum but perhaps it makes some people feel superior - don't worry about it; you got the answer and perhaps helped make a couple of people feel smug at the same time.
Don't you hate January?
Everyone gets short tempered instead of just accepting that forums like this are supposed to be a friendly source of help and advice.
For interest, broadening out the response in the way DMGbus did can be really useful for people who come across the thread as a result of popping something into google, but who's actual question, although related, isn't exactly the same as the OP.
Aren't you missing the point?
You don't have to wait until after year-end to declare dividends - why not declare interim dividends to clear the loan anyway? It seems a bit daft for the director to pay 4% interest which is taxable in the company's hands, instead of declaring interim dividends to avoid the overdrawn loan account anyway.
Also, although it's not a huge issue, if you do it the way you suggest then you have to produce supplementary pages to the CT600. Perhaps more importantly, I think having overdrawn accounts at year-end even if cleared within the nine months allowed to avoid S455 charges raises the risk-profile of the company for selection for HMRC investigations.
Subcontracting offer
Dammmmmmmmm. When I saw the title I thought I could make lots of money by offering you our 'outsource your DCA' service :-(
We charge:
£150 for companies that have never traded, £250 for companies that traded in the past but don't now, and we include the Annual Return and whatever HMRC need.
We discount it for volumes, eg we have a client who has a number of dormant companies where they just wanted to secure the names at Companies House. Max discount is 20%.
For good clients who had one or two dormant companies we wouldn't charge, or maybe a nominal £50, but where clients have both trading and dormant businesses they seem to have a lot of dormant ones, not just a couple.
Charging by the hour....
...is daft if there's any alternative.
For tax planning advice the going rate seems to be moving to 25% of tax saved (proper planning, not 'pay yourself £641/month and take the rest in dividends') but sometimes there isn't really a 'value' to take a percentage of. However pretty the statutory accounts are, if that's all the client is getting he won't see a huge value so then our role is to educate them about what it takes to convert their carrier bag/excel spreadsheets/sage dowload or whatever into what they need to end up with.
The really silly thing about billing by the hour is that the slower you are the more you get paid, and equally badly if you invest in slick systems and staff training to be more efficient you get paid less.
Imagine getting off a train that was delayed due to signalling faults and being told that because you used the carrage for longer than normal there would be a surcharge, or paying less for your ticket when HS2 comes in because the journey time is shorter.
We don't sell time, we sell advice, peace of mind, business improvements, tax savings etc.
The above may be incorrect
I was researching this and came across a reference to EC Regulation 883/2004 which changed the rules from 2010. Where the employer needs to provide for UK national insurance, they need to set up an NI only scheme which covers both employer and employee NI contributions. The employee needs to account for tax only either through a DPGEN tax-only scheme, or through self-assessment.
Law unto themselves?
Isn't there some umbrella body for the main lenders who can issue sensible guidelines? It doesn't help to bleat about it.
The excellent point made above about the impact of capital allowances (and dividends!) on SA302's should be enough to convince them that it's the least useful thing for them to rely on.
Don't charge but...
.... the problem we do get is when the new accountant writes asking for information when we haven't ben authorised by the (soon-to-be-ex) client to provide it. I just inform the new accountant that we don't have authorisation and leave it up to them to arrange it.
If it was a particularly important client we may use it as a reason to start a dialogue to persuade them to stay, but apart from one client who left because we charged extra for having to complete basic bookkeeping work (which the letter of engagement clearly made his responsibility) and one who left because we refused to do the the work unless he agreed to let us register him for VAT - he was way over the limit - most have changed because they've moved area.
The 'VAT' one was the only one where we had to write a screed under the 'any professional reasons why we shouldn't act' question pointing out the client's obligation to register. They would have picked up the issue anyway hopefully, but I didn't want to leave any wriggle room.
We normally provide a full TB even if not requested, because it makes it so much easier for the new accountant, and at the end of the day we are all professionals. (Most of us anyway!)