Reply to: Deemed payment for IR35 after company closure

[pisces]

You'll probably find he doesn't.

You'll probably find he charges you a fixed fee, but lets you pay it by installments up front....

Nope.

He even advertises his rate as monthly. Yearly rates have never once been mentioned.

[Zen Contracting]

We charge our clients a fixed annual fee for accounting service but allow payment on a monthly basis as it has cash flow advantages for both them and us.

About 80% of the work involved in assisting a contractor in the running of their limited company is the production of the year end books and returns. Therefore it would be unreasonable of a contractor to pay his accountant installments for 4 months and then expect a full set of accounts and returns.

Regards.

David.

[blacjac]

My accountant charges monthly and I've never agreed a yearly contract so if that was me I would not expect to pay a full 12 months money for a part year's accounts however I would happily pay a fee for the final accounts and tax return but wouldn't expect to pay something like 6 months money for it.

You'll probably find he doesn't.

You'll probably find he charges you a fixed fee, but lets you pay it by installments up front....

[pisces]

What you've got to ask is how much another accountant would charge to wrap your accounts up? Maybe ask around.

How much is four months payment?

[AZZIK]

Spoke to accountant they want four months payment up front when closing comapny for paperwork

Is this normal?

[ASB]

They were my thoughts to as I pay monthly fees.

You may be right - but it would be fairly unusual. The point being they don't do 1/12th of your annual account each month. They will post things etc, however production of the annual accounts etc is the major portion of the overall work they will do. This amount of work is not particularly dependant upon the volume of transactions.

Certainly I would not expect to pay full price if stopping half way through a year - but I'd expect to pay more than half.

[AZZIK]

They were my thoughts to as I pay monthly fees.

[pisces]

My accountant charges monthly and I've never agreed a yearly contract so if that was me I would not expect to pay a full 12 months money for a part year's accounts however I would happily pay a fee for the final accounts and tax return but wouldn't expect to pay something like 6 months money for it.

[ASB]

I have managed to get to the bottom of it from what he is saying his accountant was not sure if he was in IR35 so I think he just put him down as inside IR35. His accountant has been rubbish and may be the cause of all this. As the accountant says he has to pay the deemed payment HMRC have not sent any requests to view his contract.

I would not mind leaving my company open but accountant will charge me if I do until they do end of year accounts thats why I thought if I close company down I only have to pay accountant charges for next 4 months for them to prepare necessary paperwork.

To be honest I doubt if it will make much difference to the overall accountancy bill. Although you (probably) pay monthly this is likely just a payment on account against an agreed annual service fee.

If you close the co down halfway through the year then this does not mean the accountant only has to do half the work.

[AZZIK]

I have managed to get to the bottom of it from what he is saying his accountant was not sure if he was in IR35 so I think he just put him down as inside IR35. His accountant has been rubbish and may be the cause of all this. As the accountant says he has to pay the deemed payment HMRC have not sent any requests to view his contract.

I would not mind leaving my company open but accountant will charge me if I do until they do end of year accounts thats why I thought if I close company down I only have to pay accountant charges for next 4 months for them to prepare necessary paperwork.

[ChimpMaster]

He closed a company down and has a deemed IR35 bill of £6,500 - which doesn't sound like a lot of money. Perhaps he was on a very low rate, or the company wasn't operating for very long.

But... if he has been running the Ltd for some time, then it might be wise of him to accept this payment and let the company close down quietly. He doesn't want to unnecessarily draw more attention to it.

[Bluebird]

just don't close the company down - you can file accounts each year - if they are "nil" I would have thought that it won't cost you much.

Then close down in 6 [?] years time, by which time HMRC won't be able to touch you.

[AZZIK]

Not as far as I know I have emailed him to ask the question

[pisces]

Sounds like they're trying it on to me.

Did they see his contracts?

[AZZIK]

he went perm to a different company 400 miles away from the previous one.
Thats what I wanted to ask if it was a standard thing for the HMRC to send out a letter for deemed IR35 payment when you close the company down and wait and see who accepts it and who argues against it.