Reply to: Accountancy Costs for Contractors

[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.

[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!!!

[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.

[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

[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.

[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.

[Ardesco]

This is precisely my point ,, we seem to be charged different prices for I would assume the same sort of accounts
I

This is the whole problem 2 people have posted saying £1000 and you are assuming that they have the same structure as you. Myself being one of the people who posted that I pay around the £1000 mark a year I know that my accounts are not simple and they do not just include my contracting money, hence why my bill may be higher than yours.

You don't know what oraclesmith does (who is the only other person who has posted a figure)

Your assumption that we all have the same sort of accounts is incorrect and probably why there are such large variations. Even with simple accounts you will have some people that do nothing all year and then throw it at the accountant, and some people that do everything and just get the accountant to check it, again a huge difference in cost.

Generall speaking you get what you pay for, the more work the accountant has to do on your accounts the more expensive it is and the more expertise the accountant has in your particular area of accounts the more expensive they are. It's like owning a car, I could get a roughly similar car from Audi/VW/BNW/Skoda but I can bet that the top of the range skoda will be substantially cheaper than the top of the range BMW.

[MarillionFan]

I did take some different quotes recently. SJD was more expensive than two others I looked at, but his guys were more professional & efficient than the others. If I had just been contracting I would have used his services, but as my needs are more varied I have decided to go with a local one I can meet with.

[gravesendboy]

This is precisely my point ,, we seem to be charged different prices for I would assume the same sort of accounts
I can understand people who only take out money when they need it but this does'nt apply to the vast majority of us .. we only need to look at the higher tax threshold every year and know that if we restrict ourselves to this . wey won't pay any more additional tax( I refer to dividend income only)
Is this the additional type of service you refer to that accountants charge extra for ?

--
Why should one accountant charge a 1000 for this and another 500
I imagine having a fancy London address might have an increased cost but surely not to the tune of an additional 500
It would be useful if the accountancy companies who advertise on this site would give us an insight into this

[MarillionFan]

I have just been given a quote by local accounts for £500 per year.

[Ardesco]

eg why does sjd charge 85 pounds a month and Quay accounting charge only 55..

i think you will find that you are unlikely to get a static fixed fee in most cases. Some people have easy accounts some people have nightmare accounts and the amount you pay is normally determined by the amount of work the accountant has to do. The difference is cost above is probably because the accounts in question are offering different levels of service (best way to find out what that is is ask them).

I refer to them being straightforward accounts on the basis of what the majority of contractor earns in a year and for that tax planning does'nt come into it as we need to get out all the money from the company that we can!

Again you are assuming that everybody has the same circumstances. I only take out what I need to take out, some people take out everything, some people take out none, everybody has slightly different circumstances and I would expect most contractors to have a Plan B in anticipation of rainy days.

[gravesendboy]

To the people who think this is spam , 'they seem to know their stuff and their charges are extremely reasonable 'is hardly a glowing reference
My understanding of extremely reasonable may be completely different to others but you miss the point of my post which is to query on what basis some companies charge £1000 '' what do they get for the £1000 ?

eg why does sjd charge 85 pounds a month and Quay accounting charge only 55..

I refer to them being straightforward accounts on the basis of what the majority of contractor earns in a year and for that tax planning does'nt come into it as we need to get out all the money from the company that we can!

[oraclesmith]

Of course it's spam. I use a reputable business accountancy firm and they charge £1k a year as well.

[Ardesco]

I cannot see how fellow contractors can be charged near a £ 1000 pounds to do accounts that are so straightforward
One of my fellow contractors gets his refund from the Revenue for on line filing but the accountants keep a £ 100 of it .. why ?

Two problems here, the OP is assuming that everybody has straightforward accounts and he is classifying the refund from IR as a discount in his accounts fees.

My accounts (as i'm sure is the case with many other posters on this board) are not particulary straightforward. I have my Plan B and Plan C which also have to be sorted out and my accountant also provides tax advice, does my tax returns and checks through my contracts for me. I'm happy with the amount I pay him and I get the cheque from IR for the online filing tax rebate posted out to me when it comes through.

I have to agree that it does come accross as a feeble attempt to market the OP's company Pondlife

[Pondlife]

Smells like