I'd really appreciate getting some feedback from other bookkeepers re what they charge clients for completing their tax returns. I am a recently qualified bookkeeper. Do you charge by the hour, do piece work, or get a gut feeling for each one?
But there is an underlying question not specific to self assessments (which lets be honest is a give away add on) in that how do we come up with our charge rates.
Now, we've had many (many, many) debates on here on the subject of value priceing. i.e. the customers willingness to pay for what they believe a job is worth (value perception).
Now, thats all very well and good but the question to ask yourself is how much is your time worth.
You have spent a lot on training, professional memberships, software, insurances, etc. So what price do you put on your time and is what the customer is willing / able to pay enough to justify that.
So, what do you think that you are worth per hour?
Many bookkeepers do not even consider that (and that they do not probably means that they are actually in the wrong profession) and quote for jobs where they do not even come away in real terms with the equivalent of minimum wage.
Now, therein lies another issue in that no matter what you attempt to charge there is always someone out there happy to undercut you to get the work regardless of the income level. So do not try to compete on price otherwise you will end up in the fools paradise of loads of work but no money.
The case last night was asking whether £100 was too much for self assessment.
Consider that from the perspective of your time. How long would it take to do a self assessment? You have an initial meeting, a gathering and checking of the underlying documentation, MLR checks on the client, engagement procedures, a second meeting (or time spent via phone/email) with the client in order to clarify matters, Another meeting to sign off the self assessment before you file it.
All in lets say that you spend eight hours with a relatively simple one off client (of which the self assessment itself is perhaps an hour).
So you then need to look at what the hourly rate is that you expect to charge clients, multiply that by the assumed total hours and then add a percentage (say 20%) to give you a little room for negotiation.
The key to everything is how much do you think that you are worth per hour of your time.
Once you have set your fee's for the client do not change them unless the client moves the goalposts otherwise iit looks unprofessional. First year with a client you will win some and lose some on the time to rate.
The more that you do, the more that you forsee the issues before you start the work so the more that you win.
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.
Thank you so much. That has given me plenty of food for thought and really helped me to not feel so alone with all the questions coming up. What a wonderful resource!
They are hard questions you are asking. I'm juggling divorce, kids, dogs, health issues and a strong desire/need to get working. I feel split all ways. The hardest bit is that I've been so long out of the workforce in any serious way that I just don't know how to put a monetary value on something like my time, which is always in deficit. I'm scared I'm going to overcharge because it all feels so important to me. £100 for doing a tax return seems crazy cheap, especially when I'd be pouring my best into getting it right. But I don't have enough confidence to be scaring everyone off with high rates. What is a high rate? What is low?
Ive just posted to the link Shaun sent you - Ive not cited rates but hope it helps. Part of it is geographical - I have clients in the richest part of Cheshire who I charge more for than those in Manchester. Always ask lots of questions to pin down what they do/want as the more you ask the less likely you are to get it wrong. The best question is - tell me about your business....you will be amazed how much info you get from most. Never quote until youve had that conversation.
__________________
Joanne
Winner of Bookkeeper of the Year 2015, 2016 & 2017
Thoughts are my own/not to be regarded as official advice,which should be sought from a suitably qualified Accountant.
You should check out answers with reference to the legal position
Unlike others we charge fixed prices for our fees.
1. For a small sole trader (less than £40k turnover) accounts and tax return is £360 +VAT. This assumes that they keep good records themselves.
2. If someone has say a property that they rent out then standard price is £240 +VAT for property accounts and tax return
3.If someone just needs a tax return only then is generally £120 +VAT though took on a new client the other day (husband and wife) who are both retired. Have state and personal pension income, managed and personally run share portfolio and some land they rent out. Quoted £200 + VAT for each return as bit more than just the normal P60 and dividends from a limited company.
Most of our clients fall within the relevant fixed fee bracket depending on structure of business, turnover and quality of records. If after the first year we have got the price wrong and takes a lot more than we thought in costed time we review the following
1. What could we do to make the job more efficient.
2. What could the client do to make the job more efficient.
If cant do neither of the above we either increase price or say bye-bye to the client as fortunately we are in the position where we can refuse work if either doesnt fit the type of client we want to work with, isnt worth the effort or the client is a PITA client.
Thanks Joanne and Mark, all interesting stuff. I guess I'm gonna work out where I fit in to it all over time. Before the kids I worked for several small businesses, a day here, couple of days there, always at their premises. It was easy then to charge an hourly rate, being paid for making a cup of tea or working flat out, it evened out and we were all happy. Whilst I'd be really happy to get back to that kind of work too, its tax returns that have come my way so far and knowing how to charge is proving to be one of the most challenging aspects. Largely because I'm doing them at the kitchen table and am spending an inordinate time wading through hmrc helpsheets, taxcafe books and google to make sure I do them correctly. I hope I will now be able to save at least some time by posting questions to this forum. You all seem so helpful and hopefully are used to being asked what I worry will sound like stupid questions I should know the answers to! I used to phone HMRC a fair bit to get the answers from the horses mouth but I find them nigh on impossible to get hold of these days. I was waiting on the line for 2hrs and 3mins yesterday (on their tax credits helpline for my own affairs) and then they hung up!
