After being self-employed for 18 months and doing all my own finances, I'm considering biting the bullet and getting someone else to give me a hand (though I'll still do the basic day-to-day things myself). Partly because it's time consuming and my time can probably be better spent working on other aspects of my business, and partly I keep worrying I'm missing things or not maximising what I can set against tax etc.
I've had a chat with an accountancy firm, and just wondered what other people's experiences were and whether or not these looked like reasonable charges?
I've been quoted 375 + VAT for doing my end of year accounts & submitting my tax return for this year (sole trader - very straightforward).
And I'm also considering switching to be a Ltd company as I think there would be some benefits for me to do so, but the costs associated with this have been quoted as one-off fee of 275 for incorporating, 650 per year for dealing with company accounts/corporation tax, 195 per year for doing company secretarial work, 165 for running payroll (just me taking a salary), and 210 for submitting my personal Director's tax return (all those + VAT). That's obviously a steep hike in costs...
Does anyone have any idea whether or not this sounds like the going rate, or should I shop around a bit? I'm in the SE (but not London) so don't expect to necessarily get the cheapest rates going - and I'd prefer someone I can speak to face to face for advice/support so although I know there are online firms out there I'll probably go for a local company.
Based on my firm's fees - in Shropshire - the sole trader fees seem very reasonable. Obviously it depends on what your business is. If you run a consultancy business with monthly invoices to your customers and very few expenses then the accounts for this will be a lot cheaper than arts&crafts seller who makes some items, resells others, uses the internet and stalls at craft fairs to sell etc. It's basically about the number of transactions and the related complications.
Limited companies are always more expensive because of additional requirements, both for the accounts and for corporation tax. Company secretarial fees seem excessive but again, I don't know whether there's anything in your business that means more than average amount of company secretarial work. Payroll... are you planning to take your salary monthly or annually? Payroll reporting requirements have become more complex this year so that might make it a bit more expensive. Director's tax return: if your income is only your salary from the company and dividend that you will be taking then this seems excessive. If you have anything else - rental income, shares being bought and sold, trust income etc then £210 is reasonable.
As you can see a lot of it depends on your business and what you'll actually get for the money. Are certain advisory services built in? Are they advising you on the level of salary to take from the company, for example, or is that extra? If you might want to have a company car... would they just tell you over the phone whether it's a good or bad idea or would they charge you a fee for looking into it? What about VAT registration? Is there a danger that your turnover will exceed the VAT threshold? Would they advise you on what to do?
Thanks - that's helpful. I'm a marketing consultant - very low overheads (I work from home so it's basic admin costs plus some advertising/business development costs), 2-3 invoices go out a month. Not near the VAT threshold or likely to be in the near future. Re payroll, I think they advised monthly salary but don't know on what basis - and yes, the Director's tax return is solely based on this business and no other income so I did think that was excessive.
You've given me some good areas of questioning here - and I'm not sure how the advisory services stack up so I'll probe a bit deeper and maybe speak to another firm for comparison.
Hi, I also run my own accounting business and mine is in the South East (not London) and I wouldnt charge that much, but it sounds pretty standard for an accounting firm quote because they have higher overheads to cover.
I always recommend even to my own potential clients, to shop around. Get a few quotes, meet the accountants your going to be working with (especially at an accounting firm as often its the junior staff doing most of your work and dealing with you on the phone) and then decide who you feel most comfortable working side by side with.
I'd suggest one of those quotes comes from a sole practitioner who should charge you less as usually will have much smaller overheads to cover and can be more negiotable on price. A good accountant (I think at least) should be friendly, helpful and show interest in your business and its growth potential.
I dont think the Limited fees sound too high for SE and higher fees is unfortunately always one of the big drawbacks of going Limited....
as others have said you can probably get the limited company fees down a bit by going to a sole trader.
£165 for a year of payroll sounds very reasonable to me if you're doing a monthly payroll as you have to file monthly now if you're paying yourself monthly.
Incorporation you could probably get for around £150, year end accounts and tax probably around £500, personal tax return around £100-150.
And if you go to a small sole trader they won't be registered for VAT so you'll save that (assuming you either aren't registered for VAT yourself or use flat rate scheme).
Big potential saving to be had on national insurance paying yourself as an employee could set off these costs depending on how much you're making.
Problem is lots of good accountants don't want one off small jobs, they want bigger or ongoing bookkeeping jobs. For example I don't do personal tax returns unless I do bookkeeping as well for the company.