Is this normal for an accountant and HMRC to be constantly so far apart?

[Loulouboho]

Two years in a row I pay an accountant to help me with my tax return and honestly my confidence in her is very wonky at this point.

Last tax return she told me I might have to pay ~£500-600 and then I got hit with a £9K demand. This year she told me I was due a >£5K tax rebate. They have offered me £250.

Why is this so different? I literally struggling to understand how to fill this and calculate it which is why I pay her to help me. I feel as though my confidence is just gone now in this accountant. Is this normal to get it so wrong?

Even if does relate to earlier years your accountant should be able to justify it and follow the paper trail.
im not sure what her £300 has actually got you that you couldn’t do yourself?
She would have hated one of my clients who would question why his actual tax refund/payment was pennies different to his calculation. Usually due to rounding to nearest £ on each figure entered.

I am cross if the HMRC figure is out by more than £10 from mine.

And that is only when people have not received accurate state pension codings.

Otherwise I aim to be within pence.

I sell US shares regularly (from my employment) and I calculate this all myself and frankly once you've done the pain of understanding the rules once it's not that hard. I then type it all into the online tax return system and it calculates the tax due for me. So frankly if your accountant can't do this it's quite baffling!!

@Loulouboho You say she's a qualified accountant. What is her actual qualification?

Yes this describes my situation perfectly. I’m worried about making a mistake to be honest. I was paying her for accuracy and peace of mind but have gotten neither. Thanks I will challenge her. Her website says she is a chartered accountant.

I developed the confidence to do my own self assessment after my accountant didn't submit my return, I went to do it and result was X tax owed. He did my return charged £300 for the service and said I was wrong and it was Y tax owed.
Well guess who was correct...me. I haven't used an accountant since. I know it's just a basic return and I should be able to work it out but for some reason the second you say HMRC it puts the fear of god into people.

There should be no difference at all. It's all computerised/electronic. The figures she puts into the tax return will produce a figure for tax due. All tax return software uses algorithms/code produced by HMRC, so they will always match against the computation that HMRC send out! (With a couple of well known exceptions).

I suspect that there may be confusion around payments on account which is where I find most clients really struggle to understand what's going on. That's why I always lay it all out in the covering/explanatory letter to the client in great detail.

With payments on account, the thing is that the "tax liability" for the year just ended isn't what you pay as it needs to be adjusted against payments on account paid during the year, which are themselves set by the prior year tax return, so it does get complicated.

It sounds as if your accountant isn't explaining it properly to you rather than them making mistakes.

Chartered Accountants are qualified to do everything from auditing to company tax to personal tax. I’m a chartered tax accountant and as I did little with corporate tax I wouldn’t want to advise on that. What does she say she specialises in as it doesn’t look like it’s PAYE tax. If you’ve sold company shares there is a risk you’ve strayed into payment on account territory. Which needs to be explained carefully and it can be mitigated if certain situations are going to be met.

OP have you actually checked whether your accountant is actually chartered. You can check on the appropriate institutes website if she actually is but you need to know which one.

What letters does she have after her name?

TBH I have letters after my name

but have learned from bitter experience that they can be meaningless
if the individual is not competent to carry out the work in hand
or is just sloppy.

There are also some very dodgy sets of letters out there that cost not much and mean less.

Letters mean very little. I have numerous letters from qualifications but they just mean I passed the exams/submitted the relevant work experience.

Accountants have a vast remit. I haven't done personal tax for quite some time but im qualified to do so. It doesnt mean much just having letters

I agree. I'm a chartered accountant but also a member of two other associations/institutes so could use three sets of letters after my name.

It does indeed just mean that I passed exams at the time, decades ago, and that I have ongoing CPD and PI insurance, but very little in the way of any other checks that I'm competent - it's mostly done on trust besides the CPD and PII which are obligatory.

Back in the 80s, I thought it hilarious I had to sit an exam on Capital Transfer Tax a couple of months AFTER it was scrapped and replaced with Inheritance Tax, but never had to do an exam on Inheritance Tax! (In reality, there wasn't that much difference and IHT has changed so much in the decades since, even an exam on IHT in the 80s would mean nothing now).

Most accountants will have the sense/morality to only offer services they know they're competent and confident to perform and not take on work outside their level of experience/knowledge. After all, "accountancy" is a massive wide ranging area and no single person could possible know everything about everything, so most accountants are just "generalists" and know a bit about most things and know when to refer to specialists - a bit like medical GPs really - often more of a "point you in the right direction" kind of thing!

Thanks everyone. Very helpful. I’ll pick up with her this afternoon. And apologies for delay responding - She’s got ACCA listed on her website

Hmm quick google! That’s more generalist and suits a job in multi country organisations. Chartered Accountant is more country specific and even then covers a lot of stuff.
Me thinks she has stuck some letters on her website and hope it impresses everybody.

The letter my business partner recieved from the HMRC and the online amounts are different...

I'd be concerned not only that she and HMRC are far apart but that she can't explain it and doesn't want to find out what went wrong.

Are they actually qualified?

ACCA is a rock solid qualification
entirely comparable to ICAEW / CPA / CIMA etc
but
it does not guarantee competence

The only time our clients returns are wrong is when they forget (despite us asking) to tell us something. Student loan, marriage allowance transfer. Etc.

Agreed, none of the professional bodies "guarantee" competence, but all the main "chartered" ones as mentioned are very similar in terms of admission standards, exam standards, ongoing monitoring, rules and regulations, etc.

ACCA, ICAEW, CIPFA, CIMA, are all "Chartered" bodies.

Jesus, is it normal to charge £300 for a tax return ? I’ve clearly been undercharging .

Depends on the client and the complexity. I charge anywhere from £200 to £1,000 plus VAT.

This isn’t really making much sense.

the accountant completed a tax return and submits it which shows tax due (sane as if I do it myself). So how is any difference arising?

the calculation page should show it clearly. It’s either different inputs for income (or tax already paid) or some software issue on one side calculating tax due wrongly?
or potentially it’s right for the year but payments for previous or future years is confusing matters.

but any accountant who can’t reconcile that is frankly incompetent. A good reconciliation always makes me happy! 😃

HMRC issue a revised calculation and you should be able to see where that differs to your tax return. Your accountant should be able to explain it easily to you.

I check every calculation where it is different, and it is usually where the client has forgotten to mention something, like pension, student loan, interest received over £1K, child benefit etc.

If HMRC calculation has everything on it that you advised to your accountant, then they should have come up with similar figures.

Ask them for a copy of their tax calculation so that you can see where it varies and take it from there.