Which accountant?

[7of9]

I have visited three accountants so far. I am slightly confused now. Because although the way they calculate the tax is pretty much the same, their charges are very different.

Company 1: The accountant said something like ‘Hopefully I only need to see you once a year’. It sent me bad signal because I am not sure if he is going to be very willing to help. He charges 1200+VAT each year. He seems to know lots about the IR35 and has offered a free IR35 reviews.

Company 2: The accountant is freelance but He is in the business for more than 20 years. He can calculate everything really fast, but is unable to explain things very well. He also seems very forgetful. But he responses really fast and is the least expensive one because he doesn’t need rent an office in the city centre. He is doing works for 9 IT contractors at the moment.

Company 3: The accountant is the most logical person among them. He can explain everything really clearly. But I felt he is doing everything' by the books' and is unwilling to find the most tax efficient way for me. He doesn’t want to do the IR35 reviews but he recommends specialists to me. He also offers unlimited business advice, so I can talk to him or meet up with him whenever I need him. But he is the most expensive one. 1400+VAT.

I prefer company 3 as he can explain everything really clearly, but I am really concerned that I am going to pay a lot more tax as he is doing everying "by the book". For example, both Company 1 and 2 mentioned that I can claim up to 75 pounds each week as office rental. But company 3 said I can only claim 3 pounds each week because I live there as well.

Company 2, only concern is that he can’t explain things really well. So I may get confused.

I have asked them to calculate the approximate tax I need to pay for this year and their results are pretty much the same. I don’t mind paying more for a good accountant. But if their caculation is the same, why should I pay double the price?

Which one shall I go for?Any advice and suggestions are greatly appreciated!


Thanks =)

[rmmc]

I prefer company 3 as he can explain everything really clearly, but I am really concerned that I am going to pay a lot more tax as he is doing everying "by the book".

I am an accountant and I do by the books. As an accountant we have to follow so many rules, regulation and laws. Particularly Money Laundering and Proceeds of Crime Act.

For example, both Company 1 and 2 mentioned that I can claim up to 75 pounds each week as office rental. But company 3 said I can only claim 3 pounds each week because I live there as well.

OK. All three accountant are talking about two different things.

Accountant 1 & 2.

Both suggesting that you rent your home / flat to the company and charge £75.00 in a rent. However, did they mentioned to you that in turn this would be an income for the home/flat owner and should be reported on to self assessment form as a rental profit?

Also did they explain to you consequences of commercial use of the residential property. Did they explain to you how you overcome this problem?

Accountant 3

As your business / business is home based so you work from home. So an employee, when you work form home you can claim and extra expenses incurred because of you work from home such as heating, electricity, interest cost of the mortgage etc.

Where do you work? At home or at client's premises? Do you carry out substantial duties at home? If not, then you may not be able to claim much.

There are two ways you can claim, £3.00 per week you do not need to do any calculations. However if it is more than that, then HMRC may ask how you arrive the figures. There are some examples are on HMRC's website.

Most accountant use either software, spreadsheet or HMRC website to calculate the tax. So as long as all the available relief claimed than the tax should be more or less same.

[Sausage Surprise]

Why would you bother visiting accountants - I've never ever met mine and their service is excellent. I'm with Nixon Williams but there are loads of others that people on here would recommend for contractors.

[Waldorf]

If you do not want to do things "by the book" why use an accountant at all? You could just take the money and run. If an accountant is offering to bend the rules, I would suggest you run a mile from them.

My accountant has a guide http://www.nixonwilliams.com/LimitedCompanyGuide.pdf which you may find useful.

[SallyPlanIT]

I prefer company 3 as he can explain everything really clearly, but I am really concerned that I am going to pay a lot more tax as he is doing everying "by the book". For example, both Company 1 and 2 mentioned that I can claim up to 75 pounds each week as office rental. But company 3 said I can only claim 3 pounds each week because I live there as well.

I would go with who you most feel comfortable with. Where as an accountant is there to advise you, you as director make the decisions. So, if you are ill advised and follow that advice, t's you HMRC will come back at.

In the case of £75 per week as office rental, unless you really do pay office rental for a real office for that amount, you cannot claim it. No. 3 is correct with the HMRC approved £3 weekly for "use of home as office".
If you work from home and can prove that it increases costs such as gas and electric then you may claim the additional cost.

[Old Greg]

Why would you bother visiting accountants - I've never ever met mine and their service is excellent. I'm with Nixon Williams but there are loads of others that people on here would recommend for contractors.

Agreed. Although I use SJD who also have a good reputation and who I can also recommend.

As OPs have suggested, don't go near 1 or 2.

When it comes to cost, I would consider your rate. If you are on £500 per day, so £100,000 + p.a. if you stay in work, I wouldn't worry about cost too much. A good accountant will save you more than you spend. If you're on £200 per day, I'd see cost as a bit more of an important factor.

[7of9]

RMMC thanks!

Both suggesting that you rent your home / flat to the company and charge £75.00 in a rent. However, did they mentioned to you that in turn this would be an income for the home/flat owner and should be reported on to self assessment form as a rental profit?

Hello rmmc, thank you very much for your reply. The first accountant did mention about it. My situation is that I work 7 hours at client site and 1 hour at home. I am paying my partner half of HIS mortgage. Accountant 1 said as long as the rent is to support his mortgage. It doesn’t not count as profit and he can get away with it as long as its below 75 pounds a week.

Most accountant use either software, spreadsheet or HMRC website to calculate the tax. So as long as all the available relief claimed than the tax should be more or less same.

If that is the case, what the different do they make? Why should I go for the expensive one? If I pay the same tax to the government? If its just the matter of expenses, I can just claim my travel expense. To be honest, the home office rental won’t save me much. I just use it as a guideline to compare the accountants' knowledge.

[Old Greg]

Hello rmmc, thank you very much for your reply. The first accountant did mention about it. My situation is that I work 7 hours at client site and 1 hour at home. I am paying my partner half of HIS mortgage. Accountant 1 said as long as the rent is to support his mortgage. It doesn’t not count as profit and he can get away with it as long as its below 75 pounds a week.



If that is the case, what the different do they make? Why should I go for the expensive one? If I pay the same tax to the government? If its just the matter of expenses, I can just claim my travel expense. To be honest, the home office rental won’t save me much. I just use it as a guideline to compare the accountants' knowledge.

It's a case of getting a good one, not an expensive one. A good one will pro-actively advise you to your advantage, and warn you of potential pit-falls.

[7of9]

I would go with who you most feel comfortable with. Where as an accountant is there to advise you, you as director make the decisions. So, if you are ill advised and follow that advice, t's you HMRC will come back at.

In the case of £75 per week as office rental, unless you really do pay office rental for a real office for that amount, you cannot claim it. No. 3 is correct with the HMRC approved £3 weekly for "use of home as office".
If you work from home and can prove that it increases costs such as gas and electric then you may claim the additional cost.

Thanks Sally. I feel comfortable with accountant 3 as he can explain the concepts very well. But he charges on everything. If i want his advice, i have to pay actual 20 pounds each month. Otherwise, he charges 100 pounds each hour for giving advice. Also he refused to caculate the tax I need to pay because I havent appointed him. So basically he wont give any thoughts or advice, or do anything until i sign with him. Guess I probably wont go for him. All other accountants including online accountancy firm SJD all happy to give me rough idea how much i can take home tax free.

[7of9]

It's a case of getting a good one, not an expensive one. A good one will pro-actively advise you to your advantage, and warn you of potential pit-falls.

Good advice. Thanks.