Are accountants worth their money for simple ACNTS

seatbeltnoob

For SME a good accountant who charges more than average can save the firm way more than a "standard" accountant. They can advise on spending money to qualify for grants and other dispensations. Structure the business more tax efficiently etc.

But for sole traders and other small businesses which are owner operator businesses, are they worth the price they charge?

I used to pay an account £700+VAT a year to review my books and do my annual tax returns and accounts. They made a few recommendations about use of home, flat rate vs standard rate, etc. But there was never a massive saving to be had.

interestingly it was after taking their advice and doing FRS when I realised that I should probably switch to a self employed accountant that does not charge vat. I found a chartered accountant on people per hour for £150 (about £145 with a pph discount coupon).

Now I was an AAT student and my business is fairly straight forward.

How has others experiences been going through the cheap route and getting a cheap accountant?

Anyone gone through the opposite route, doing the DIY route and getting a cheap accountant and then signing up a more pricier acounant and realised they overpaid tax?

I should add I use freeagent so the software is very good at doing all the calculations for me, producing all the reports, complying with all the latest payroll rules etc. So there's less work needed by the accountant.

singhini

about 8 years ago HMRC sent me a letter asking me to do self-assessment so I contacted my dads accountant to help me (I'm a regular employee on PAYE so really basic tax return).


I paid £150 (incl VAT) each year for approx. 5 years until HMRC wrote to me saying no need to do it anymore. I prepared all the calculations and put them onto a piece of paper thus my accountant just needs to input the figures onto his software and submit to HMRC.


I thought £150 for less than 30 mins work was expensive but I suppose I'm paying him for his knowledge, suggestions and actually inputting the data accurately (I'm sure the figures I put on the piece of paper are not laid out 100% correctly and I might have listed a net figure where as gross figure might be needed etc...).


ironically I spoke to the accountant just this Thursday to say that I voluntarily want to do self assessment this tax year and the first thing he said was his prices had gone up since he last did a tax return for me.


I'm still going to use him as using an accountant gives me confidence the tax return will be done correctly and I discuss upto date tax legislation with him and not rely on the internet which might be out of date or inaccurate.


I know HMRC say tax shouldn't be taxing but I find it is. Ive got hybrid company car which means aswell as paying company car tax, I'm able to claim tax relief on the cost of charging the car for business miles, however there's no logical place on the self-assessment form to record this, hence leave it to the accountant.

Pennywise

Like any other service, it depends on your abilities, time, finances, motivation, etc.

Some people service their own cars, some people pay others to do their cleaning, ironing and gardening, some people do their own decorating, others pay Tesco to select and deliver their shopping.

We all have our own reasons for either doing things ourselves or getting others to do it for us.

Some people with simple tax affairs, or who are organised and good with figures, take the decision to do it themselves and google for information. That's fine if they're capable to do it and have the time. It's not rocket science, but you have to accept that some people simply don't have the time or inclination, or don't have the ability to do the research and number crunching required. Horses for courses.

Another point is that the accountant's hourly rate is set for the typical work of an accountant. If it's, say, £100 per hour, that's the same whether he's "filling in a form" or whether he's doing some technical/complex work. So whilst he's just "filling your form" which you think is a low-skilled easy task, it means he's lost the opportunity to do a much higher "worth" work whilst he's working on your "easy" job. So, to him, his time is worth the same, whatever he's doing.