I have been asked how much I charge for certain services. A mini cab driver approached me last week and when I told him £125, he told me I was too high and that his accountant charges £100 and has done for the last 10 years. I politely said that was my fee and carried on. I am based in London, is this too high? I have a SA customer who was very happy with that fee as her accountant charged £180 last year and has increased his fees this year. I also did a bit of market research and phoned a local accountant (I know I am a bookkeeper!) telling them I was a driving instructor and enquired how much they would charge me for a self assessment, he would charge £235 +VAT!!!! How much does everyone else charge for a self assessment?
Funnily enough, carrying on from the mini cab driver, I thought I would drop a few leaflets into a local mini cab firm incase any of their drivers needed their self assessments completed. The owner of the business came and found me once i had left and said that he would be interested in me doing their accounts. He enquired how much I charged for the SA and also how much I would charge to do the accounts. I said that it was hard to quote him for the business accounts until I see what was involved. I was hoping someone could give me a rough idea of what they would charge. They are a small limited company with one director registered??? Also has anyone else had any experience in doing the accounts for this type of business and could point me in the right direction. This will be my first regular customer if I secure them and choose to take them on but even the experience of having the meeting will be good practice!
-- Edited by KBS on Monday 18th of November 2013 08:22:13 PM
-- Edited by KBS on Monday 18th of November 2013 08:29:05 PM
I think all those prices quoted are cheap and especially for London. I have a couple of taxi drivers and I charge one £180 inc vat and the other £200 plus vat. The first guy has a 'book' where he records his weekly fares and expenses whereas the other guy doesn't have much of a system. I have about 7 driving instructors and charge around the £175 to £250 mark.
Can't help so much with the taxi firm but of course if they are just looking for the cheapest job be a bit wary as there will always be someone to under cut you. However when appraising the job ask to see last years accounts and check out what the last accountant charged so you know the ball park. I would want to look at their bookkeeping to see what they do currently as it may be a huge mess!
I agree with Rob, the prices seem a bit on the cheap side to me. However, that really depends on the model you're going for. I do a few driving instructors from across the UK on a monthly basis with final accounts and SA included for £20 a month.
I was always a bit wary of taxi drivers. They always seem to be ducking and diving a bit too much for me. I'm a bit risk averse.
I have a couple of driving instructors. One pays £180 and the other £200. The cheaper one is because they pay £15 per month whereas the other pays on completion.
For limited companies depends what is involved but my fees start at £720 where there is little bookkeeping work to include
1. Year end accounts and abb accs to CH
2. Company tax return prepared and submitted
3. Monthly payroll for up to 2 employees
4. Personal Tax return for upt to 2 employees
5. Annual Return prepared and submitted to CH.
My new website, which should be ready by the end of the month, will have all my prices on it. I want to do it that way so people can see what they are paying for what. Will put it on here first for comments before it goes live.
I am not VAT registered at the moment so is £720 in total. Though probably will be VAT registered next year as currently have about £83k of recurring clients on my records. Though some might drop off before do any work, though hopefully not much.
If someone doesnt need say payroll then the price is still £720, unless they are being particularly difficult about the fee, which no one to date has been. Will probably increase my starting fee to £900 and include free tax investigation insurance from Taxwise as currently in the process of canvassing my existing clients o take it out. As long as I cover my costs then will take out the all practice insurance though will only cover those who pay it. It is amazing those who take it and those that dont.
I have a client who is a limited comopany and is a pub that turns over about £250k per year and they said they dont need the cover for their limited company which I have priced at £4 per month whereas had a joiner who turns over about £10k and they have taken the cover. The pub is open to all sorts of investigations by HMRC; cash business, relatively high turnover, VAT registered, payroll issues, etc.
The price also assumes the records are in good condition. If they were to give a bag of receipts and I had to do the bank rec then there would be an additional charge. Though happy to set up a system for the client, included in the initial consultation, so they keep the records as I need, whether that be on excel, VTcashbook, xero or SAGE. From my viewpoint it is worth the investment of time at the start to get them in order from the start.
yes it looks like vat is looming large for you! I assume you have quite a lot of non vat registered clients and of course the next hurdle is telling them you are charging vat, if they are price sensitive a 20% hike in their fees may be off putting assuming you pass it on completely, if they are ok with it you wonder why you weren't charging 20% more from the start!
I looked at Taxwise some time ago but really struggled with my small clients to get them on board and Taxwise really only offered a cost effective solution if you covered pretty much all clients. What is their offering to you, can you pick and chose? The pub client is nuts, you're absolutely right that they are prime targets and for the price of a pint a month they would say no but I bet if you said 'oh I'll throw it in if you give me a pint every Friday' they'd bite your hand off!
Majority of clients are not VAT registered so just need to think how to pitch it from a political viewpoint so not to scare off clients. Will probably factor in the VAT say over two years so the increase not quite so harsh.
Re taxwise they can either do an opt in package based on whether tax only, sole trader, partnership/ltd company or my preferred option is to go for a full practice cover and pay £175 per month or £2100 per year. Though will only cover those clients who pay in and those that dont will bill them if they want to me to do any work. Currently have 43 clients taking the cover paying £1728 in premiums so probably just need another 10 or so to say yes so that I cover the cost of running it plus a small admin charge.
As you said the pub client not looking at the big picture in not to take it up. They are a prime candidate for being selected and when done will be a lot of work potentially involved. They are in my top 3 clients that should take the cover, fortunately the other 2 said they want the cover. I had a woman who runs a dog walking business that probably turns over about £5k a year who said this morning she wants the cover but then have a pub turning over about £250k who say they dont. It a strange world, but thats clients for you.
Mark
-- Edited by MarkS on Wednesday 20th of November 2013 01:33:18 PM
yes it looks like vat is looming large for you! I assume you have quite a lot of non vat registered clients and of course the next hurdle is telling them you are charging vat, if they are price sensitive a 20% hike in their fees may be off putting assuming you pass it on completely, if they are ok with it you wonder why you weren't charging 20% more from the start!
I looked at Taxwise some time ago but really struggled with my small clients to get them on board and Taxwise really only offered a cost effective solution if you covered pretty much all clients. What is their offering to you, can you pick and chose? The pub client is nuts, you're absolutely right that they are prime targets and for the price of a pint a month they would say no but I bet if you said 'oh I'll throw it in if you give me a pint every Friday' they'd bite your hand off!
I have been considering teaming up with another bookkeeper and creating a separate company for PAYE and bookkeeping. Then my company would just do the Accounts and Tax work.. something the bookkeeper wouldn't be involved in. I am told this is legit and wouldn't be considered tax avoidance for VAT. My old bosses had a partnership and a limited company which did much the same thing, running from the same office... though the company was VAT reg, as well as the P/ship, by the time I got there. I am not sure why they did that structure, but no doubt was related to tax planning. I never understood why they didn't incorporate the lot.
If I was only the shareholder, and they were only a director paid wages, would that make a difference? They would work part time, and be happy of the insurance cover and training that I would provide.
Sorry for hijacking the post! Would love to hear comments! (Be nice!)
I would think it would fall foul of the 'Disaggregation' rules, since you are basically doing exactly that. It would be different, I believe, if you had only ever done accountancy and then set up a new company dealing with bookkeeping and payroll since there would have been no disaggregation. I'm certainly no expert on it but that's how I understood it to be.
The issue in these sort of relationships is always with being able to trust with absolute certainty the quality of work and work ethic of the other person. If you can find that perfect match of two people who thnk and work along the same lines then its a sound move.
Sneaky settup of the joint venture
You have all the shares, they think that they have some power as a director. The reality is that they are only an employee with a fancy title.
From the tax perspective the bookkeeping business run by a bookkeeper as a feeder business to your practice can be viewed as a totally seperate business entity although the ownership of the shares does make it a related party.
The settup seems preferable to a tied contractual arrangement with an independant bookkeeper and as you are already taking them on as an employee there is non of the usual agro over disguised employment.
The approach that I considered some time ago was a rent a chair in my offices option but that never took off as I didn't find anyone that I would feel comfortable renting a chair to.
Good luck with the new business arrangement... If I had to give any advice though it would be that if you are going to go into this sort of arrangement with anyone do not become too freindly with a person that you may eventually have to let go (been there done that got the T shirt writing the book).
kind regards,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
I read it slightly differently but after reading your post and thinking again about the scenario you make a very good point in relation to disagregation.
If the bookkeeping business was totally seperate and owned by the bookkeeper then it would be different but Michelle basically running the show you're right and the two businesses are too closely related to be treated seperately unless one was able to get an HMRC agreement to such effect.
kind regrads,
Shaun.
__________________
Shaun
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
Perhaps then, my previous firm, had already set up an accounts practice and weren't offering payroll and bookkeeping from the start?
My plan is in no way imminent, or a dead cert, it was just something I was toying with. I have been giving the bookkeeper a lot of support while they are doing AAT. They find bookkeeping clients and I get the accounts work. I check their work and bill the client and pay them for the bookkeeping. That way they don't have any AAT licence issues over doing the work.
I am nowhere near the VAT threshold at the moment, but I am working on it!
I think your previous firm were ok because both the company and partnership were vat registered so hmrc would not have lost out on any revenue. I wonder though if there were two entities set up and both were registered for vat but one was on the FRS. All input stuff would go through the standard rated business and just a bit of wages etc through the other whether that would be a small victory for us little traders...not that the FRS is very generous for us which really annoys me, we are on similar rate as a contractor/consultant who only sells his labour but we have to buy all sorts of expensive software, go to cpd etc!
Yes I am not sure if the Limited Company (which was set up for Payroll and Bureau work) was ever not VAT registered. It had been going a long time before I came along, so very possibly registered from day one, regardless.
That's an excellent point you make about FRS, you clever/crafty bugger!! Although yes, its not particularly lucrative compared to others. Was FRS around in 2003? I've just checked and that's when the Ltd Co was created. Perhaps it was more a personal choice for the partners.. DLA issues etc. Also, clients were assigned a partner and I know they kept a tally of their own income, so maybe it was to change the profit share as they liked? One did enjoy his golf days more than the other ;0)
Thanks for your replies, they are very useful! If a small client came to you with a bag full of receipts and invoices for you to complete their SA, how would you price this?
Thanks for your replies, they are very useful! If a small client came to you with a bag full of receipts and invoices for you to complete their SA, how would you price this?
Would really depend on how many receipts and invoices there were.
Personally I would try to educate the client to keep the records themselves. If they really didnt want to do this then would charge accordingly but when I tell most clients the costs for doing this they are usually keen to be shown how to do it themselves.
We recently became VAT registered and I've been pleasantly surprised by how few issues it has raised, even with our large number of small, non VAT registered businesses. I'd been dreading it but it hasn't been a problem. We haven't increased prices by the full 20% for those clients, we've taken into account input VAT and our initial VAT reclaim.
I'd be interested to know what other people do regarding investigation insurance, we offer it but have an extremely low take up rate.
I was thinking along your lines. Would probably bring VAT increase in over a few years for nonVAT reg clients. Like you said will be able to reclaim VAT on things such as rent plus VAT on all office equipment. Then again 20% on someone paying £300 per year is only £60 per year extra, so providing you are giving them a good service it is likely they will stay with you.
Re the tax insurance I have priced it really cheap so to get high take up level. £24 for tax return only, £36 for sole trader and £48 for partnership/ltd co. As long as cover my costs thats all i am looking for. Have about 30 clients will need to chase up next week to see if they want it or not, they havent replied to the 3 emails sent so far, but only £150 away from covering costs so looks like will meet costs plus a small admin cover on top.
We haven't got a whole of practice policy but one where we are charged a premium per client on it...maybe that's where we went wrong as the premiums are a lot more than yours, which is why the take up is so low I'm sure.
It does beg the question of whether we should 'self insure'. I have around 200 clients so if I offered them all insurance that covered my costs in case of an investigation, say to the equivalent of £1000 of charge out rates at an average of £20 then I could claw in an extra £4000 if they all said yes. It might have to be pitched at a lower rate, eg for a £150 client perhaps offer them a limited cover at £15 per year and a £2000 client it maybe closer to say £60?
