Originally posted by SallyPlanIT
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Reply to: Which accountant?
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Previously on "Which accountant?"
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Originally posted by 7of9 View PostThanks Sally. I feel comfortable with accountant 3 as he can explain the concepts very well. But he charges on everything. If i want his advice, i have to pay actual 20 pounds each month. Otherwise, he charges 100 pounds each hour for giving advice. Also he refused to caculate the tax I need to pay because I havent appointed him. So basically he wont give any thoughts or advice, or do anything until i sign with him. Guess I probably wont go for him. All other accountants including online accountancy firm SJD all happy to give me rough idea how much i can take home tax free.
Pro-activity should be high on the list, it's no good advising you after the effect, i.e. after your financial year or tax year has ended.
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Originally posted by 7of9 View PostHello rmmc, thank you very much for your reply. The first accountant did mention about it. My situation is that I work 7 hours at client site and 1 hour at home. I am paying my partner half of HIS mortgage. Accountant 1 said as long as the rent is to support his mortgage. It doesn’t not count as profit and he can get away with it as long as its below 75 pounds a week.
As long as rental income is covered by the mortgage interest (note interest not the repayment instalment) and other utilities expenses and it is reported by the house / flat owner as their rental profit (rental income less allowable expenses).
Originally posted by 7of9 View PostIf that is the case, what the different do they make? Why should I go for the expensive one? If I pay the same tax to the government? If its just the matter of expenses, I can just claim my travel expense. To be honest, the home office rental won’t save me much. I just use it as a guideline to compare the accountants' knowledge.
Here are my brief thoughts on selecting an accountant
You need to go with one you like and get on with, knows the rules, regulations and one would save you tax within the law, meet the deadline filing of the tax return and payment of tax on time, easily contactable. Also some one who do not copy and paste when producing the accounts.
What you do not want is tax evasion which is illegal.
I suggest, ask all the accountant what services are covered? Also check what qualification they hold and what professional body they belong to. Also ask for the copy of an engagement letter & terms of the business. It would be a good bed time reading!
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Originally posted by SallyPlanIT View PostI would go with who you most feel comfortable with. Where as an accountant is there to advise you, you as director make the decisions. So, if you are ill advised and follow that advice, t's you HMRC will come back at.
In the case of £75 per week as office rental, unless you really do pay office rental for a real office for that amount, you cannot claim it. No. 3 is correct with the HMRC approved £3 weekly for "use of home as office".
If you work from home and can prove that it increases costs such as gas and electric then you may claim the additional cost.Last edited by 7of9; 13 October 2010, 21:09.
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Originally posted by 7of9 View PostHello rmmc, thank you very much for your reply. The first accountant did mention about it. My situation is that I work 7 hours at client site and 1 hour at home. I am paying my partner half of HIS mortgage. Accountant 1 said as long as the rent is to support his mortgage. It doesn’t not count as profit and he can get away with it as long as its below 75 pounds a week.
If that is the case, what the different do they make? Why should I go for the expensive one? If I pay the same tax to the government? If its just the matter of expenses, I can just claim my travel expense. To be honest, the home office rental won’t save me much. I just use it as a guideline to compare the accountants' knowledge.
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RMMC thanks!
Originally posted by rmmc View PostBoth suggesting that you rent your home / flat to the company and charge £75.00 in a rent. However, did they mentioned to you that in turn this would be an income for the home/flat owner and should be reported on to self assessment form as a rental profit?
Most accountant use either software, spreadsheet or HMRC website to calculate the tax. So as long as all the available relief claimed than the tax should be more or less same.
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Originally posted by Sausage Surprise View PostWhy would you bother visiting accountants - I've never ever met mine and their service is excellent. I'm with Nixon Williams but there are loads of others that people on here would recommend for contractors.
As OPs have suggested, don't go near 1 or 2.
When it comes to cost, I would consider your rate. If you are on £500 per day, so £100,000 + p.a. if you stay in work, I wouldn't worry about cost too much. A good accountant will save you more than you spend. If you're on £200 per day, I'd see cost as a bit more of an important factor.
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Originally posted by 7of9 View Post
I prefer company 3 as he can explain everything really clearly, but I am really concerned that I am going to pay a lot more tax as he is doing everying "by the book". For example, both Company 1 and 2 mentioned that I can claim up to 75 pounds each week as office rental. But company 3 said I can only claim 3 pounds each week because I live there as well.
In the case of £75 per week as office rental, unless you really do pay office rental for a real office for that amount, you cannot claim it. No. 3 is correct with the HMRC approved £3 weekly for "use of home as office".
If you work from home and can prove that it increases costs such as gas and electric then you may claim the additional cost.
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If you do not want to do things "by the book" why use an accountant at all? You could just take the money and run. If an accountant is offering to bend the rules, I would suggest you run a mile from them.
My accountant has a guide http://www.nixonwilliams.com/LimitedCompanyGuide.pdf which you may find useful.
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Why would you bother visiting accountants - I've never ever met mine and their service is excellent. I'm with Nixon Williams but there are loads of others that people on here would recommend for contractors.
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Originally posted by 7of9 View Post
I prefer company 3 as he can explain everything really clearly, but I am really concerned that I am going to pay a lot more tax as he is doing everying "by the book".
Originally posted by 7of9 View PostFor example, both Company 1 and 2 mentioned that I can claim up to 75 pounds each week as office rental. But company 3 said I can only claim 3 pounds each week because I live there as well.
Accountant 1 & 2.
Both suggesting that you rent your home / flat to the company and charge £75.00 in a rent. However, did they mentioned to you that in turn this would be an income for the home/flat owner and should be reported on to self assessment form as a rental profit?
Also did they explain to you consequences of commercial use of the residential property. Did they explain to you how you overcome this problem?
Accountant 3
As your business / business is home based so you work from home. So an employee, when you work form home you can claim and extra expenses incurred because of you work from home such as heating, electricity, interest cost of the mortgage etc.
Where do you work? At home or at client's premises? Do you carry out substantial duties at home? If not, then you may not be able to claim much.
There are two ways you can claim, £3.00 per week you do not need to do any calculations. However if it is more than that, then HMRC may ask how you arrive the figures. There are some examples are on HMRC's website.
Most accountant use either software, spreadsheet or HMRC website to calculate the tax. So as long as all the available relief claimed than the tax should be more or less same.
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Which accountant?
I have visited three accountants so far. I am slightly confused now. Because although the way they calculate the tax is pretty much the same, their charges are very different.
Company 1: The accountant said something like ‘Hopefully I only need to see you once a year’. It sent me bad signal because I am not sure if he is going to be very willing to help. He charges 1200+VAT each year. He seems to know lots about the IR35 and has offered a free IR35 reviews.
Company 2: The accountant is freelance but He is in the business for more than 20 years. He can calculate everything really fast, but is unable to explain things very well. He also seems very forgetful. But he responses really fast and is the least expensive one because he doesn’t need rent an office in the city centre. He is doing works for 9 IT contractors at the moment.
Company 3: The accountant is the most logical person among them. He can explain everything really clearly. But I felt he is doing everything' by the books' and is unwilling to find the most tax efficient way for me. He doesn’t want to do the IR35 reviews but he recommends specialists to me. He also offers unlimited business advice, so I can talk to him or meet up with him whenever I need him. But he is the most expensive one. 1400+VAT.
I prefer company 3 as he can explain everything really clearly, but I am really concerned that I am going to pay a lot more tax as he is doing everying "by the book". For example, both Company 1 and 2 mentioned that I can claim up to 75 pounds each week as office rental. But company 3 said I can only claim 3 pounds each week because I live there as well.
Company 2, only concern is that he can’t explain things really well. So I may get confused.
I have asked them to calculate the approximate tax I need to pay for this year and their results are pretty much the same. I don’t mind paying more for a good accountant. But if their caculation is the same, why should I pay double the price?
Which one shall I go for?Any advice and suggestions are greatly appreciated!
Thanks =)Last edited by 7of9; 12 October 2010, 20:20.
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