Accountancy Costs for Contractors

[oraclesmith]

If you don't want to look like you're posting spam then (a) get some more posts up on more mundane topics like Andyw's mum or AtW's Super Killer App or whatever (b) don't mention how wonderful/crap a particular firm is on your first post and (c) don't question why people do things the way they do, then suggest some helpful company which will do it better. Nuff said.

As for accountancy fees, I pay £1k a year for self assessment returns, final accounts, company returns, PAYE runs and on-line filing, corporation tax returns and general advice. I am happy to pay this because (a) the firm is reputable and has a lot of in-house expertise including tax specialists, small business specialists, payroll specialists as well as links to banks, finance companies and other service providers etc (b) there is the potential for referrals to other of their clients for my services and (c) I don't want to scrimp on accounting services because the cost of errors can be considerable and (d) there are dodgy accountants around as HMRC knows only too well.

If your limited company is only getting in £20k per year, then I guess £500 either way is significant, but most contractors are running much larger businesses and are more interested in getting it right for HMRC than saving a quid or two here and there. In my opinion.

PS. I run my limited like a small business. ie. I have capital investment on equipment, business stationery, multiple bank accounts, branding/advertising spend, VAT, filing systems, some general trading expenditure and income as well as contract work. My accountant charges pretty much the same fees for any small business as there is usually a baseline amount of work to do each year.

[malvolio]

And at the risk of repeating myself, from a similar thread, the cost of an accountant is a lot more complicated that the bill at the end of the year:

Work out how much is your accountant saving you in correct filing of data and calculating correct payments so avoiding interest and penalties (probably £200-ish a year, but last time I tried it was rather more), plus however much time you would need to do it yourself accurately at double your normal rate, since you would be using up your downtime to do it (in my case something like 15 man days a year, or around £15k, and I was an accountant in a former life)

Or to put it simply, if your accountant costs you money, get a new one.

[gravesendboy]

There is a lot of talk about professional service , you get what you paid for etc but how many of these companies actually employ qualified accountants to get their accounts completed
A fellow contractor I work with pays 1000 a year but nearly lost his mortgage offer as the company completing his accounts did'nt have a recognised accounting qualification and the bank would'nt accept that reference!!
How many have you have checked the qualifications of your accountants ?
I agree that if you have different income streams , then the price may be justifiable but for straightforward contractor accounts .. no way

[oraclesmith]

Mine are Chartered Certified Accountants and Registered Auditors. My main contact is Chartered, a Director in the firm and had worked for a number of years for Touche Ross/Deloittes.

[Ardesco]

That is probably THE most stupid statement I have ever heard! Why would you give somebody money to do your accounts without checking that they are qualified ???

Secondly price will differ depending on where you are based. If you live and work in London and use a local accountant it is probably going to cost a lot more than a local accountant in North Wales.

And finally...

I agree that if you have different income streams , then the price may be justifiable but for straightforward contractor accounts .. no way

How many times do I have to say it, your idea of a straightforward contractor account is probably not the same as sombody else idea of a straightforward contractor account AND different contractors will have the accountant do different amounts of work for a straightforward contractor account!!!

[ASB]

Why should one accountant charge a 1000 for this and another 500

So, on this approach all .NET Architects should charge the same then??

The obvious reason why charges are different is because of market forces. They vary from supply/demand to the qualifications/experience of the accountants and their staff.

In my experience the actual accounting work for the company accounts is in the order of 2-3 days. Add on any other extras, like vat etc, and I'd be worried about somebody qualified who didn't think that was worth a reasonable sum.

Was it Oscar who said price is what you pay, value is what you get.