accountant charging minimum fee of 1140 plus VAT for 5 months work

[someguy1]

Hi

I'm new to the contracting game but I'm just about to sign up with an accountant for the following

* company year end accounts
* tax computations and returns
* payroll and paye returns
* vat returns (although in my case they're wont be any)
* directors personal tax return

They charge £95 plus vat a month, which doesn't seem unreasonable but the contract with them states that basically no matter when I join them they get to charge me a full years worth of fees, eg £1140 plus vat.

Is this normal? its seems a little unreasonable considering there's only 5 months of the financial year left

[CheeseSlice]

its seems a little unreasonable considering there's only 5 months of the financial year left

are you intending to wind up the company or something after those 5 months? or stop paying an accountant?

edit: I pay £80+VAT for a similar service, although I do my own VAT returns. No upfront fee, and I think I was initially in a 12 month contract with them so could have effectively be charged for early exit of the contract.

[RichardCranium]

I'm just about to sign up with an accountant

They charge £95 plus vat a month, but the contract with them states that basically no matter when I join them they get to charge me a full years worth of fees, eg £1140 plus vat.

The during-the-year work is fairly trivial (you could do it yourself). The big stuff occurs at year end. So if you join a week before month end or 11 months before month end, it doesn't make much difference to the amount of work they have to do.

But then you could wonder why you must pay £95 per month rather than £15 per month and an extra £960 for year end. Why should they sit on all those lumps of £95 in advance of doing the work?

[Nixon Williams]

They charge £95 plus vat a month, which doesn't seem unreasonable but the contract with them states that basically no matter when I join them they get to charge me a full years worth of fees, eg £1140 plus vat.

Is this normal? its seems a little unreasonable considering there's only 5 months of the financial year left

It is common although it does not have to be normal!

This is something you should check before you sign up.

We have no minimum period, so if you want to stop using us after a month, you can do! We have confidence in our service so we see no need to tie your hands behind your back for 12 months.

Alan

[theroyale]

My accountants are Primus - they charge 60+VAT a month - they were recommended by others on this forum and I've been very happy with their level of service.

[someguy1]

Thanks everyone for your replies, its good to know that there are accountants who don't do this

[d000hg]

The during-the-year work is fairly trivial (you could do it yourself). The big stuff occurs at year end. So if you join a week before month end or 11 months before month end, it doesn't make much difference to the amount of work they have to do.

But then you could wonder why you must pay £95 per month rather than £15 per month and an extra £960 for year end. Why should they sit on all those lumps of £95 in advance of doing the work?

I guess it is easier to have a monthly fee for most customers, and also they have to pay staff the full year; getting all their income in one month would incur extra difficulties I suppose. I imagine most accountants would let you pay annually if you wanted.

InTouch are another recommendation; I use them although Primus also seems quite reasonable when I considered them.

[jmo21]

I've always looked at it as almost a monthly retainer fee, I always have access to my accountant, (or one of his team for easier queries) through the year.

[rd409]

My accountants are Primus - they charge 60+VAT a month - they were recommended by others on this forum and I've been very happy with their level of service.

I would try and negotiate with the accountant. It depends where you come from. If your current accountant is also a good one ie. if they have all your documents and papers up to date, this cut their work to considerable levels, and the new accountant would be willing to negotiate the rates. It would be tough negotiating if you have been doing the DIY accounts till date, but still you can try.

Few tips

1) Offer to pay the fees upfront for next year or so.
2) Check if they do a Self assessment only service. Offer to pay them that fees extra on top of your monthly committments if (1) fails.
3) Try and stay with your current accountant for next few months. It's not really that long.

Think as a business. If you are asked to sort out issues with a client's system, how would you decide your charges? Accountants are in the same situation with you right now.

[SallyPlanIT]

It is common although it does not have to be normal!

This is something you should check before you sign up.

We have no minimum period, so if you want to stop using us after a month, you can do! We have confidence in our service so we see no need to tie your hands behind your back for 12 months.

Alan

I think the post is regarding paying a full years fees for a set of accounts, not being locked into time periods. The annual fee is usual as the accountant still needs to complete the same work regardless. However, it is also quite usual for an accountant to negotiate a discount when you join part way through the year.

Ask them....you never know!