What to expect from my accountant

murraynt

Hello all.

I hope this is the correct section to post. If not please let me know.

I've come here to get other people's point of view on some accounting issues I've had.


November 2016 I was offered an engineering contract roll after finishing university. I set up my own business and bank account and the rest.

I carried on with my work for a few months and realised doing my own accounting was well out of my comfort zone.

5-6 months after I set up my business I contacted my current online accountant.

I was paying £175 per month to my online accountant and I have to upload my invoices and bank transactions every month and analyse them which seems to be the norm for most online accountants.

The accountants would sort out the VAT PAYE (I'll come to the later) and the rest. I still had to do my self-assessment or my accountant would do it for a fee of £125. I would also have to submit my returns that they would provide.

January 2018. I have been offered a permanent role at my job so I close up my business. I paid my £6149.29 VAT that I had due on my account and started to do all the necessary steps to close up my account. Some months later I got an unpaid corporation tax bill for £6128.42. I called up HMRC and explain i had already paid it and said there was no money due on my account according to the HMRC website (I've been looking at the VAT website all along).

After some digging from the HMRC it turns out I had only paid my vat and not the corporation tax bill. The reason for this is I thought they were the same payment as the vat bill as the number were so close. HMRC took my side and understood.. My mess up.

Whilst looking at the amount of profit that my company made my father noticed that my returns that my personal accountant prepared never took into account a wage taken out, instead it was all taken out as dividend..

Throughout my contacting business I just took a around 1.5-2 k per month out of my account per month as a payment to myself. I wasn't told any different.

I called up my personal accountant and they said a PAYE account was never set up for me even though it was on the notes that it needed to be completed.

So now I'm left with a bill ~£1700 larger than it needs to be. I am going to ring HMRC tonight and ask if they can backdate my PAYE scheme so I can recoup some of it. But they might not let that happen

Even if they do allow me to back date I can't take out the full £11,500 as I will owe NI and I will be charged a late penalty according to my accountant.




So, to everybody my question is. What should I expect from my personal accountant?

Every month he seen my invoices, spending etc. Every month this was an opportunity to see something was wrong and it was not tax wise to operate like this.
Would it be overstepping the mark to request some of my monthly fees back if they cannot rectify my bill?

chrismac1

Legally you should expect him or her to deliver what is in the letter of engagement for the fee you've agreed and paid. The PAYE muckup is a big one, a year's state pension credit is worth around £1,000 on standard actuary calculations never mind the extra tax you've paid.


You've also been paying quite a bit for this. My website charge for limited company contractors is £85 a month which inlcudes PAYE and self-assessment. Note to site moderators - this is not an attempt to advertise myself just give some benchmarking, £80 to £100 a month is really the sort of price range you should expect.


First raise this with the accountant and see what the response is.

murraynt

chrismac1 wrote: »

Legally you should expect him or her to deliver what is in the letter of engagement for the fee you've agreed and paid. The PAYE muckup is a big one, a year's state pension credit is worth around £1,000 on standard actuary calculations never mind the extra tax you've paid.


You've also been paying quite a bit for this. My website charge for limited company contractors is £85 a month which inlcudes PAYE and self-assessment. Note to site moderators - this is not an attempt to advertise myself just give some benchmarking, £80 to £100 a month is really the sort of price range you should expect.


First raise this with the accountant and see what the response is.

Hi Chris. Thanks for your reply.

I did think the fee was expensive but the firm seemed to have some good reviews at the time so i just went with it. the fees you have mentioned put what i was paying into perspective..

Would you mind going into a small bit more detail on state pension credit. It's never been mentioned to me before.

I am going to read over the contract i signed now.

chrismac1

So, this may or may not be OK in your specific circumstances. Each tax year a given NI number either gets a full or partial credit towards UK pension, or does not. For limited company contractors, the "box standard" method of doing this for 2018-19 tax year is to put through £702 of monthly salary.


Note, however, that I am not doing this for some clients. For example, one set up his limited company in August, having earned £40k since 6 April 2018 in PAYE job. So that job will already have got him his state pension credit, there is no need for me to set up a company PAYE scheme until next April.


Note this is the sort of thing I explain to all new clients, to ensure that I make the right decision to either set up the PAYE scheme or not.

murraynt

chrismac1 wrote: »

So, this may or may not be OK in your specific circumstances. Each tax year a given NI number either gets a full or partial credit towards UK pension, or does not. For limited company contractors, the "box standard" method of doing this for 2018-19 tax year is to put through £702 of monthly salary.


Note, however, that I am not doing this for some clients. For example, one set up his limited company in August, having earned £40k since 6 April 2018 in PAYE job. So that job will already have got him his state pension credit, there is no need for me to set up a company PAYE scheme until next April.


Note this is the sort of thing I explain to all new clients, to ensure that I make the right decision to either set up the PAYE scheme or not.

That's interesting Chris. Thank you for that. :beer:

Before the contracting role I wasn't on a PAYE scheme for 6-7 months and when i was on PAYE it was only a part time job for around £400 a month... Come to think of it. I'm not sure if i've even been set up on PAYE during my part time job either?.

looks like i could have missed out on more than i thought. I will ask the question to my accountant on Monday

I am tempted to contact another accounting firm as i'm afraid this accountant won't maximise my tax benefits. They only seem to answer questions that i ask rather than being proactive and telling me how I could save. Then again I've already committed to this company giving them around £1800 to them so i would like the accounts to be correct!

I'm glad that I'm not the only person that thinks they have made some mistakes. :T

Do you think it would be reasonable to ask for some of my fees back so I break even if HMRC don't allow the back date of PAYE and the fdact I can't take out 11,500 as a salary?

murraynt

I found the summary of services that they sent over when i started.

I've taken any company references out of this.

Summary of services

Whether you’re thinking of contracting for the first time or moving away from your Umbrella,
we’re here to guide you every step of the way.
When deciding if trading through a Limited Company is suitable for you, it's important you make
the right decision and understand the key issues from the outset.
We’ll help you set up your Limited Company, explain your responsibilities as a Director and
advise you on how to run your company smoothly and efficiently.
This type of advice and support will be a feature of the relationship from day one.

Free incorporation
We’ll incorporate your company for FREE within 24 hours and supply you with your company
certificate, detailing your company name and number. We’ll also register you for VAT, and PAYE
and help you set up a company bank account with Metro Bank.
This process is very straight forward and is done through an online portal, so you can keep an eye
on how your company incorporation is progressing.

Monthly Services
Our all inclusive monthly package includes everything you need to run your company smoothly:
• Unlimited expert advice from your dedicated Personal Accountant whenever you need it
• 24/7 access to your own online portal where you record your accounting transactions
• Preparation of your company accounts and submission to Companies House and HMRC
• Preparation and submission of your company’s annual return, which also covers the annual
£13 filing fee
• Preparation and submission of your company’s quarterly VAT returns
• Preparation and submission of your Self Assessment Tax Return
• Administration of your payroll for up to two employees (yourself and, if applicable, your
spouse regardless of whether they are a shareholder or not)
• Unlimited IR35 risk assessments of your contracts


Summary of services
• Up to £75,000 of professional fee protection should HMRC open an enquiry into your tax
affairs, or challenge you on your IR35 status
• Dealing with all compliance work relating to Companies House and HMRC such as P11Ds,
changes to Companies House details
• Use of our address as the registered office of the company free of charge
• Mortgage and rent accountant references
• 10% discount off new IPSE membership
• Access to preferred suppliers to help you with business banking; independent financial
advice; business insurance.

chrismac1

• Administration of your payroll for up to two employees (yourself and, if applicable, your
spouse regardless of whether they are a shareholder or not)


You need to ask if that has been set up and, if not, why not.

murraynt

chrismac1 wrote: »

• Administration of your payroll for up to two employees (yourself and, if applicable, your
spouse regardless of whether they are a shareholder or not)


You need to ask if that has been set up and, if not, why not.

Thanks Chris. I will ask the accountant on monday and come back with the answer.

Dazed_and_confused

And this part contradicts your original post,

Monthly Services
Our all inclusive monthly package includes everything you need to run your company smoothly:
• Unlimited expert advice from your dedicated Personal Accountant whenever you need it
• 24/7 access to your own online portal where you record your accounting transactions
• Preparation of your company accounts and submission to Companies House and HMRC
• Preparation and submission of your company’s annual return, which also covers the annual
£13 filing fee
• Preparation and submission of your company’s quarterly VAT returns
• Preparation and submission of your Self Assessment Tax Return

murraynt

Dazed_and_confused wrote: »

And this part contradicts your original post,

I can't remember why the accountant said I had to pay, but there was a reason.I will ask this question on Monday also. :mad:

Potbellypig

murraynt wrote: »

I was paying £175 per month to my online accountant

Jesus Christ!