Accountant trouble

[BlasterBates]

To save 10,000 pounds tax would mean spending 50,000 on something you don't really need, because if you'd have needed it you would have bought it. Sure it's probably nice to have the tool but surely not worth reducing your net income by 40,000. Sounds like bad advice.

The Accountant should be at least pointing out the tax advantages on pension contributions, but beyond that I think there would be nothing much to offer to an IT contractor.

[piebaps]

What does it say in your contract with the accountant? He may be doing exactly what he is contracted to do and no more. If you want advice on how to reduce your tax liability it may be extra work which may change your fee structure.

[Chart Accountancy]

Hello all,

I am working through a Ltd company and have trouble with my accountant. It's a large accounting firm and i'm with them since I started the business some 5 years ago. In general they were OK, and did all the VAT and Corp Tax returns on time.

Over the years, my Corp Tax returns were always in the region of tens of thousands of pounds, however I was now advised that I could have easily avoided paying this much if for example I invested in more tools (which I would have welcomed!) or save tax through other (legal) means. And this is something I should have been advised off by my accountant.

I know that it's also my fault (at the end of the day I am responsible for the company financials), but why do I pay an accountant if I get zero advice as to how to lower my corp tax expenditure?

My last Corp Tax return was just a couple of months away, and as always resulted in a large 5 digit payment to HMRC. But I found out that apparently I can change the Corp Tax return for the previous year once every 5 years, which will also change the reporting date. I would now like to try to claim back some of the money and rather buy some additional tools for my work instead.

Has anyone else experienced something similar? Is my plan feasible?

I guess I will need a better accountant (any recommendations? Preferably a chartered accountant?), but is there any chance to hold my current accountant responsible for the complete lack of advise or tax planning over the years?

Thanks,

Sledge

Accountants can advise on the most common allowable business expenses as a general guidance which we offer to all our clients at the start of our engagement and through regular updates to ensure businesses are aware of the expenses that they could claim as ways to reduce their corporation tax. However, the accountant cannot be expected to advise on purchasing more tools as a way to reduce your corporation tax as this would be a specific requirement for your business to run so expected that your company would purchase all the tools and materials required to provide your services. However, the accountant can advise you on other areas such as investing into a pension, expenses for annual events, use of home, trivial benefits, etc. It is best to hire a chartered/certified accountant (a member of ACCA or ICAEW) who can guide you through a compliant way to reduce your corporation tax by operating most tax efficiently considering your personal circumstances.

[northernladuk]

e.g. Putting money into a SIPP or refreshing hardware is hardly "suss" ?

I wish I'd known about the SIPP thing sooner myself, could have built up my pension pot much faster and saved a lot of CT.

Yep I get that, it's just the opening text got my radar going.

region of tens of thousands of pounds, however I was now advised that I could have easily avoided paying this much if for example I invested in more tools (which I would have welcomed!)

He mentions a very rough figure of 10's of K and then talks about paying this much. That just smacked to me he'd be paying much less like in single K's. That's pretty unfeasible legally hence my caution. If he'd said paying 20k CT and could have paid 18 then fair enough.. but that's not MUCH less.

Looks like he's aware of this and I got the wrong end of the stick. Wouldn't be the first time a poster came on here with good intentions but a whole can of worms is waiting to be opened in the background.

[Platypus]

This all sounds very suss. Artificially reducing CT sounds dubious so would be very wary.

e.g. Putting money into a SIPP or refreshing hardware is hardly "suss" ?

I wish I'd known about the SIPP thing sooner myself, could have built up my pension pot much faster and saved a lot of CT.

[northernladuk]

We always say our job as a contractor is running the business, getting the most from it and finding work. Doing to do on site is the easy bit. Even the permies can do that

There is nothing "suss" about minimizing your tax, which is legal. We're not talking about some dodgy tax avoidance scheme here.

Totally agree. It's just the way you worded it could easily take you down a route you shouldn't. Bit like maximising your take home as a brolly and someone offers you a take home of over 80%. That's one step too far but isn't obvious until you look closely. Just the wording yoy used maybe.

[SledgeHammer]

What did you accountant say when you challenged him \ her about this? If you arent satisfied with the service your accountant provides, change them.

I sent them a message and am waiting for their reply.

This all sounds very suss. Artificially reducing CT sounds dubious so would be very wary. You can be more efficient using various methods but it will always be in five figures so not sure what you are expecting.

There is nothing "suss" about minimizing your tax, which is legal. We're not talking about some dodgy tax avoidance scheme here.

At the end of the day it is your responsibility to run your business and it's a common complaint that accountants arent proactive in helping you, particularly the big ones but even the best people have been with haven't offered much more advice than phones, home office and the like.

Well, that's already more than I received.

And I know that it's my responsibility to run the business (which I also said in my first post), what gets me is that aside from completing forms I didn't really get any advice.

If you are unhappy you could try moving to a smaller setup where you get a more personal service rather than a sausage factor where you don't really know the other person at the end of the phone. Couple of them I'd consider moving to if I need to is Chris at Maslins, Sarah at Paperrocket and Michael at BI. I know all three of these speak to their clients directly so will get much better guidance.

Thanks, I'll check them out.

What salary are you taking ?

£800 for me and half of that for the other half

are you splitting divs with your wife/husband ?

Yes. And taking my wife on (which actually does help in the business, so it's not just on paper!) was another thing that they could have suggested but didn't.

Aside from completing the returns, the only real tax advise I got was taking some of the payment as dividends.

What tools are you going to buy

Mostly specialist test equipment and tools, also software.

I also work on a new product, aside from contracting.

Oh well.

[GhostofTarbera]

What salary are you taking ?

are you splitting divs with your wife/husband ?

What tools are you going to buy


Sent from my iPhone using Contractor UK Forum

[northernladuk]

This all sounds very suss. Artificially reducing CT sounds dubious so would be very wary. You can be more efficient using various methods but it will always be in five figures so not sure what you are expecting.

At the end of the day it is your responsibility to run your business and it's a common complaint that accountants arent proactive in helping you, particularly the big ones but even the best people have been with haven't offered much more advice than phones, home office and the like.

If you are unhappy you could try moving to a smaller setup where you get a more personal service rather than a sausage factor where you don't really know the other person at the end of the phone. Couple of them I'd consider moving to if I need to is Chris at Maslins, Sarah at Paperrocket and Michael at BI. I know all three of these speak to their clients directly so will get much better guidance.

[BolshieBastard]

Hello all,

I am working through a Ltd company and have trouble with my accountant. It's a large accounting firm and i'm with them since I started the business some 5 years ago. In general they were OK, and did all the VAT and Corp Tax returns on time.

Over the years, my Corp Tax returns were always in the region of tens of thousands of pounds, however I was now advised that I could have easily avoided paying this much if for example I invested in more tools (which I would have welcomed!) or save tax through other (legal) means. And this is something I should have been advised off by my accountant.

I know that it's also my fault (at the end of the day I am responsible for the company financials), but why do I pay an accountant if I get zero advice as to how to lower my corp tax expenditure?

My last Corp Tax return was just a couple of months away, and as always resulted in a large 5 digit payment to HMRC. But I found out that apparently I can change the Corp Tax return for the previous year once every 5 years, which will also change the reporting date. I would now like to try to claim back some of the money and rather buy some additional tools for my work instead.

Has anyone else experienced something similar? Is my plan feasible?

I guess I will need a better accountant (any recommendations? Preferably a chartered accountant?), but is there any chance to hold my current accountant responsible for the complete lack of advise or tax planning over the years?

Thanks,

Sledge

What did you accountant say when you challenged him \ her about this? If you arent satisfied with the service your accountant provides, change them.

There are some very good smaller accountancy services out there.

[SledgeHammer]

Hello all,

I am working through a Ltd company and have trouble with my accountant. It's a large accounting firm and i'm with them since I started the business some 5 years ago. In general they were OK, and did all the VAT and Corp Tax returns on time.

Over the years, my Corp Tax returns were always in the region of tens of thousands of pounds, however I was now advised that I could have easily avoided paying this much if for example I invested in more tools (which I would have welcomed!) or save tax through other (legal) means. And this is something I should have been advised off by my accountant.

I know that it's also my fault (at the end of the day I am responsible for the company financials), but why do I pay an accountant if I get zero advice as to how to lower my corp tax expenditure?

My last Corp Tax return was just a couple of months away, and as always resulted in a large 5 digit payment to HMRC. But I found out that apparently I can change the Corp Tax return for the previous year once every 5 years, which will also change the reporting date. I would now like to try to claim back some of the money and rather buy some additional tools for my work instead.

Has anyone else experienced something similar? Is my plan feasible?

I guess I will need a better accountant (any recommendations? Preferably a chartered accountant?), but is there any chance to hold my current accountant responsible for the complete lack of advise or tax planning over the years?

Thanks,

Sledge