Can anyone reccomend a decent accountancy firm for IT contractors?

[THEPUMA]

Try Hillier Hopkins (a firm in which I am a partner). More expensive than most on here but I would bet your net take home after our fees and taxes would be lower than any other.

[Waldorf]

Try Hillier Hopkins (a firm in which I am a partner). More expensive than most on here but I would bet your net take home after our fees and taxes would be lower than any other.

I,ve just loked at your site and i'd be £1700 pa worse off than you mainly due to you charging twice what my accountants (Nixon Williams)charge!

Some accountants seem to think we contractors are ripe to be ripped off!

[THEPUMA]

I'm glad someone took the bait!

I'm not sure how you could be £1,700 worse off when our fees are less than that. If you are with Nixon Williams I would immediately save you approx £1,000 pa by recommending you pay yourself £97 pw salary as opposed to NMW.

And that's before doing anything half clever.

And to be fair my opening gambit was that I knew we were more expensive.

[PAG]

I'm not sure how you could be £1,700 worse off when our fees are less than that. If you are with Nixon Williams I would immediately save you approx £1,000 pa by recommending you pay yourself £97 pw salary as opposed to NMW.

And that's before doing anything half clever.

And to be fair my opening gambit was that I knew we were more expensive.

NMW is for a reason. your recommendation of £97 is not wrong, however if we (contractors) get caught by IR35, then it will be us forking the bill, RIGHT !!!!

[THEPUMA]

"NMW is for a reason. your recommendation of £97 is not wrong, however if we (contractors) get caught by IR35, then it will be us forking the bill, RIGHT !!!!"

An interesting point but in fact my advice is almost always what I would do in your position so if I were a contractor affected by IR35, yes I absolutely would pay myself £97 pw.

It would be much easier to follow the crowd and advise people to pay themselves NMW but would I voluntarily give HMRC an extra £1,000 pa for no valid reason? No chance!

Why are you more likely to be caught by IR35 if you pay yourself £97 pw than NMW?

Some people may argue that you are more likely to be investigated. All I can say is that that is certainly not my experience and I've never seen any stats to back it up.

Even if it were correct, let's be a bit more scientific about this and do some numbers:-

What are the chances of an IR35 investigation if you pay £97 pw. Let's be really conservative and say 2%. What are the chances of an IR35 investigation if you pay yourself NMW? Let's go the other way and say 0%. So the increase in chances are very conservatively 2%.

Let's then argue that the chances of a successful IR35 challenge is 20% (again, very, very conservative).

The average successful IR35 challenge costs £12K.

Therefore, being as conservative as reasonably sensible, the expected cost of paying yourself £97pw vs NMW is 2% x 20% x £12K = £48.

I think more realistically the figures are probably as follows:-

Chance of an investigation if salary = £97 pw - 0.5%
Chances of an investigation if salary = NMW - 1%
Chances of a successful IR35 challenge - 5%
(And the £12K figure remains the same)

The reason I think that the chances of an investigation are higher under NMW is that HMRC are receiving cheques and payslips and P35's with figures on them so there is potentially something to investigate whereas with a salary of £97 pw the deductions are usully nil. I believe that an employer compliance officer is less likely to investigate a P35 showing nil deductions as there is less likelihood of it being wrong. This is just gut instinct though - I have no stats to back it up.

You can play with the numbers any way you like. You won't get anywhere near £1,000.

And if you're really cautious, you could just insure against the IR35 liability (I am aware that some policies require you to be pay yourself NMW but there are others that don't).

For the sake of completeness, I acknowledge that there is a theoretical argument that most directors should be paid NMW. Whilst we would argue that a director is exempt from the NMW legislation if he doesn't have a contract, it could be argued that even if he doesn't have a written or verbal contract, he has an implied one.

However, in practise I believe that this argument would rarely be applied, other than by the specialist units in Taunton and Sheffield.

The bottom line is, notwithstanding the above, there is no legislation preventing you from paying yourself £97 pw and it is the most tax efficient salary (in most cases) so why do anything else? If HMRC come along and challenge you, you've done nothing wrong so if your accountant is any good, they will defend you. You may incur professional fees. If this risk is unacceptable, you can insure against it very cheaply.

[Waldorf]

I'm not sure how you could be £1,700 worse off when our fees are less than that. If you are with Nixon Williams I would immediately save you approx £1,000 pa by recommending you pay yourself £97 pw salary as opposed to NMW.

And that's before doing anything half clever.

And to be fair my opening gambit was that I knew we were more expensive.

Nixon Williams advised a salary inline with the NMW but it was my choice, I am happy to go with them.

I compared earnings examples, using the same earnings and even on a £10K salary I am £1700 better off, so if I took a gamble and reduced my salary I would be £2700 better off! Not selling your wares too well.

I'll be sticking with Nixon Williams, they save me more money and charge less.

[Nixon Williams]

THEPUMAIf you are with Nixon Williams I would immediately save you approx £1,000 pa by recommending you pay yourself £97 pw salary as opposed to NMW.

And that's before doing anything half clever.

And to be fair my opening gambit was that I knew we were more expensive.

We certainly do recommend that our clients pay a salary at least at the National Minimum Wage(NMW) but it is open to them if they wish to pay a lower salary.

We have always been very open with what we advise our clients to do, ie, join the Flat Rate VAT scheme, claim for mileage/travel expenses, pay a salary inline with the NMW, claim other expenses such a mobile phone etc and extract the profits by dividends.

Based on the above someone on £1000/week working 47 weeks per annum would keep 80.0% of their income even with no mileage/travel expenses. This would rise to 82.0% on a £97pw salary. Your site quotes 76.9%, so much for "half-clever" thinking!

Can I suggest that you try and promote your services in a professional manner, rather than cheap knocking of the competition. We have nothing to hide in what we do and thankfully we have many satisfied clients over the past 12 years.

Alan

[Sockpuppet]

Can I suggest that you try and promote your services in a professional manner, rather than cheap knocking of the competition. We have nothing to hide in what we do and thankfully we have many satisfied clients over the past 12 years.

Agreed.

I would recommend SJD, Nixon Williams and Darren@used-to-be-1st-acc-serv just becuase they don't seem to have a chip on thier shoulders and are alway professional even to people who are not paying for their advice.

[THEPUMA]

Alan/Waldorf

You are not comparing like with like. You are comparing our MSC product with your PSC product. They are 2 entirely different products as you should be aware and are therefore simply not comparable.

There is no standard calculator on our site for our PSC product as everyone's circumstances are different but certainly anyone on NME could save at least £1,000 tax a year with us.

I was interested to note that you failed to address my logical reasoning behind why I recommend £97 pw vs NMW. Would you be able to put your line of reasoning?

You also accuse me of cheap knocking. I have reviewed my previous posts and can't find anything I would consider knocking cheaply. I will therefore redress this situation forthwith.

I note that, of Waldorf's 45 posts, approx 6 are neither singing the praises of Nixon Williams or slagging off other accountants (5 different companies by my reckoning). Are there any photos of you in the same room?!

Alan, I am just trying to challenge some of the advice with which I disagree. If you are confident that your advice is not flawed, you shouldn't feel so threatened by this. Why don't we have an open debate which may result in readers reducing their overall tax liabilities?

Joel

[Waldorf]

I can only speak for myself but i went to your site and clicked on the bespoke section, it was not clear that the calculator was only for a MSC, why are you still promoting this anyway?

It seems to me anyone could save £1K if they paid a lower salary so there is no rocket science there.

The only other accountant I am aware I have slagged off is Giant, and that is from bitter experience when I was a client. I sing the praises of Nixon Williams because I speak as I find, they are good, efficient and don't take the p**s with their fees.

PS I don't even know what Alan looks like as I have never met him!