Reply to: total newbie - accounting costs

[Contreras]

Speak to the accountant and explain you would like to take on more of the admin. For £150/month they should have time to explain basic VAT/PAYE, point you in the right direction, and/or check your returns.

Expect to put in plenty of effort reading guidance notes as well though. Doing it yourself is about being in control and getting a thorough understanding of the business not about saving money (if you value your time).

If there's a hint of trying to lock your business in I would take it elsewhere.

[SueEllen]

Also worth noting, not only should you check your current T&C's but also check with the accountant you are moving too if they will charge a balance/catch up fee.

If you move halfway through your financial year you will have paid 6 months fee's to one accountant, then have to pay the next 6 months and a balancing fee to the new accountant for them to complete your accounts/tax return etc.

Some do waiver or reduce this fee when switching

Aren't there always customers you don't want?

[Michael at BI Accountancy]

Good point. Although you pay a monthly amount it's likely to be a year's fees with a monthly payment rather than a pay per month option.

Also worth noting, not only should you check your current T&C's but also check with the accountant you are moving too if they will charge a balance/catch up fee.

If you move halfway through your financial year you will have paid 6 months fee's to one accountant, then have to pay the next 6 months and a balancing fee to the new accountant for them to complete your accounts/tax return etc.

Some do waiver or reduce this fee when switching

[northernladuk]

That would be sensible, yes. Look at the T&Cs that you signed up to. You may have agreed to a minimum term, or possibly exit fees.

Good point. Although you pay a monthly amount it's likely to be a year's fees with a monthly payment rather than a pay per month option.

[Fred Bloggs]

thanks, I think once I'm confident I'm set up correctly for PAYE etc, I'll move to another more cost effective firm.

regards,

That would be sensible, yes. Look at the T&Cs that you signed up to. You may have agreed to a minimum term, or possibly exit fees.

[Waldorf]

what type of accountancy package do folk recommend? full/mid/minimum?

Accountants who advertise different levels of service are just using marketing techniques to influence you.

They usually go for three levels, most people going for the mid range, which is what they want, very few go for the low cost version and the high cost option is just extra profit for the accountants.

They try and fool newbies into thinking they need the top priced service, often saying that you can move down when you are more confident, I bet hardly any actually do this and this is why so many contractors are getting fleeced by their accountant.

Go for a single priced accountant, the service is often more comprehensive, try Nixon Williams, good price and good service to date.

[cjonline]

Thanks for naming them so the search engines can find the thread. Firstly, there is no need to pay more to be "compliant" you'll get that from any good accountant. I see your current firm offers three levels of service between £75 and £150 a month. Unfortunately, despite loads of ticks and crosses, the website won't show me what the different levels involve. Despite you wanting a "full service", be careful there are limits on what the accountant can do or else the MSC legislation could apply.

thanks, I think once I'm confident I'm set up correctly for PAYE etc, I'll move to another more cost effective firm.

regards,

[Fred Bloggs]

Thanks for naming them so the search engines can find the thread. Firstly, there is no need to pay more to be "compliant" you'll get that from any good accountant. I see your current firm offers three levels of service between £75 and £150 a month. Unfortunately, despite loads of ticks and crosses, the website won't show me what the different levels involve. Despite you wanting a "full service", be careful there are limits on what the accountant can do or else the MSC legislation could apply.

[northernladuk]

from reading through these replies it looks like my agency (parity) have really pulled a fly one here. probably getting a nice wager from my accountant for recommending them

Without a doubt. Never let an agent guide your business decisions. All they care is about their bottom line. Your welfare wont matter a jot to them and won't help you for free so you can better your bottom dollar this recommendation makea them money.

[TykeMerc]

What I meant is that I wanted the full package at first until I learned what is required for the company then try do more myself.

I suppose what I'm really asking is that is £150+vat a rip off .. should I look elsewhere? I've looked on these forums and seen mixed advice on who to go to for accountancy. I suppose what I'm looking for is the maximum amount of work/advice offloaded to accountant for the minimum of spend.

£150 + VAT a month seems rather high to me, Nixon Williams (like most) charge a bit less than that, around £100+ Vat, I'd have to look it up to be sure. I'd call their service all inclusive and comprehensive for that fee.
As to who to go for, there's plenty of recommendations on CUK and plenty of very good accountants available that understand contractors.

[LondonManc]

To be honest, if you're on £300 a day at least, paying an extra £50 a month to stay completely squeaky clean is worth it. The accountants should be able to advise you on the most tax efficient way of getting money out of your Ltd Co as well as the best practices to follow to help yourself stay outside investigation. Listen to them - they're paid to keep up with the latest tax laws, etc.

[cjonline]

from reading through these replies it looks like my agency (parity) have really pulled a fly one here. probably getting a nice wager from my accountant for recommending them

[cjonline]

To answer a couple of the OP's points, yes you're being shafted at £150 plus VAT. Who are you using now? Most of the contractor accountants on here will "hand hold" a new bloke to a greater or lesser degree anyway without charging that kind of fee. CUK and IPSE to name just two, have good first timer guides. Regarding software look seriously at FreeAgent.

1st-option.co.uk

[ASB]

What I meant is that I wanted the full package at first until I learned what is required for the company then try do more myself.

I suppose what I'm really asking is that is £150+vat a rip off .. should I look elsewhere? I've looked on these forums and seen mixed advice on who to go to for accountancy. I suppose what I'm looking for is the maximum amount of work/advice offloaded to accountant for the minimum of spend.

You may be able to make a decent saving doing your own paye. Discuss service levels etc with your chosen provider.

But; the vast bulk of the work is not really dependant upon what you do or do not do.

If you do all your bookkeeping and present your accountants with trail balance nominal etc they still have to do all the end of year stuff. This is likely in most cases to represent a good proportion of the overall fees so even doing nearly all of it yourself won't produce a huge saving.

In much the same way as if you are not working for 6 months it is not going to make much difference (some accountants may be more charitable than others in this area of course).

What you are buying is an annual service not a monthly service. It just so happens that a lot of accountants will allow you to split payment into instalments.

[northernladuk]

What I meant is that I wanted the full package at first until I learned what is required for the company then try do more myself.

I suppose what I'm really asking is that is £150+vat a rip off .. should I look elsewhere? I've looked on these forums and seen mixed advice on who to go to for accountancy. I suppose what I'm looking for is the maximum amount of work/advice offloaded to accountant for the minimum of spend.

It most certainly is. Not only will you save money by shopping around but you will find some of them offer portals and the like that gives you much more visibility and control but still having the professional at the end of the phone.

Am happy to give Gorilla Accounting a plug who I use who are around 89 quid and you get access to freeagent which allows you track all sorts and do your own VAT, Payroll etc submissions. Learnt more from that than when I was at SJD who did it in the background.