Unnecessary but Expensive Fee for Furlough ‘Administration’ from Accountant

Nutmeg215

I contacted my accountant to tell them I wanted to furlough and after many emails back and forth, they finally told me this about claiming furlough..... 

"it will not be as simple as running the same payroll as we do every month. Each claim will require sufficient time and resources to be invested in it, to be able to make sure that it are no non-compliances.

The charges are as follows (plus VAT):

• £125 setup fee for each employee

• £25 per employee per month"

My company has TWO employees, so it would cost me £300+VAT in the first month and then £50+VAT from thereon if I continue to make a claim.  If I furlough for the last week of March, April AND May their charges equate to 21% of my furlough claim.  This percentage is even worse if I am furloughed for just March and April.  

I thought they had me over a barrel, as my Accountant has my HMRC Payroll login for the company, as they do all of my  submissions online I was unable to complete my furlough claim online myself.

HOWEVER, I rang HMRC on 21st April and explained that I wanted to make a furlough claim and explained that my accountant wanted to charge me an astronomical fee for submitting this on my behalf. HMRC (Tier Two Advisors), were incredibly helpful and have completed my claim with me over the phone.  I had the company corporation tax reference, the two NI numbers, the dates and the amounts I would be claiming so the process took less than FIVE minutes.  

I am astounded at the greed of some businesses at this difficult time. I and hundreds of other small businesses continue to pay this Accountant monthly, so their income has NOT stopped, they are still able to work and to get paid.  For an Accounting firm to take advantage of small to medium sized businesses, who have no work and therefore no income, is appalling in my opinion. When things are back to normal, I'll be looking for an Accountancy firm with better morals!

Jeremy535897

By definition you will always be able to do things more cheaply yourself than if you hire someone else to do it. Perhaps you should handle the payroll yourself in future if you find it easy to do.

SXX

Jeremy535897 said:

By definition you will always be able to do things more cheaply yourself than if you hire someone else to do it. Perhaps you should handle the payroll yourself in future if you find it easy to do.

Agreed

Hermann

Jeremy535897 said:

By definition you will always be able to do things more cheaply yourself than if you hire someone else to do it. Perhaps you should handle the payroll yourself in future if you find it easy to do.

Lets not forget the employer is already paying the accountants to manage the payroll, these fees seem to be in addition.

How reasonable the fees are will partly be determined by the contract in place but they seem excessive at first look although do the accountants provide any form cover for non payment from HMRC?

 ie: If you pay them the fee to ensure there is no non compliance and subsequently HMRC reject the claim do the accountants stand the loss and the employer still has the money? In which case it may look a more reasonable fee.

PaulCobb

We are a small accountants practice with approx. 150 payroll clients. Each client needs to deal with the Furlough scheme themselves as we dealt with payroll as a bureau and do not have authority for each client individually. We have however assisted every client in setting up government gateways and making their claims for no fee on the basis that help is required and our clients will be with us for a long time. Difficult at the moment as everyone needs help at the same time but will ease off over next few weeks.

Nutmeg215

Hermann said:

Jeremy535897 said:

By definition you will always be able to do things more cheaply yourself than if you hire someone else to do it. Perhaps you should handle the payroll yourself in future if you find it easy to do.

Lets not forget the employer is already paying the accountants to manage the payroll, these fees seem to be in addition.

How reasonable the fees are will partly be determined by the contract in place but they seem excessive at first look although do the accountants provide any form cover for non payment from HMRC?

 ie: If you pay them the fee to ensure there is no non compliance and subsequently HMRC reject the claim do the accountants stand the loss and the employer still has the money? In which case it may look a more reasonable fee.

To be fair to them, yes i believe they would cover if there was a non compliance issue raised by HMRC.  

As the figures we are claiming are so small, I’m prepared to take the risk of HMRC finding us non compliant, rather than paying the accountant upwards of 20% of our claim just to ensure our compliancy!

sliphi

Nutmeg215 said:

I contacted my accountant to tell them I wanted to furlough and after many emails back and forth, they finally told me this about claiming furlough..... 

"it will not be as simple as running the same payroll as we do every month. Each claim will require sufficient time and resources to be invested in it, to be able to make sure that it are no non-compliances.

The charges are as follows (plus VAT):

• £125 setup fee for each employee

• £25 per employee per month"

My company has TWO employees, so it would cost me £300+VAT in the first month and then £50+VAT from thereon if I continue to make a claim.  If I furlough for the last week of March, April AND May their charges equate to 21% of my furlough claim.  This percentage is even worse if I am furloughed for just March and April.  

I thought they had me over a barrel, as my Accountant has my HMRC Payroll login for the company, as they do all of my  submissions online I was unable to complete my furlough claim online myself.

HOWEVER, I rang HMRC on 21st April and explained that I wanted to make a furlough claim and explained that my accountant wanted to charge me an astronomical fee for submitting this on my behalf. HMRC (Tier Two Advisors), were incredibly helpful and have completed my claim with me over the phone.  I had the company corporation tax reference, the two NI numbers, the dates and the amounts I would be claiming so the process took less than FIVE minutes.  

I am astounded at the greed of some businesses at this difficult time. I and hundreds of other small businesses continue to pay this Accountant monthly, so their income has NOT stopped, they are still able to work and to get paid.  For an Accounting firm to take advantage of small to medium sized businesses, who have no work and therefore no income, is appalling in my opinion. When things are back to normal, I'll be looking for an Accountancy firm with better morals!

Running payroll could be exactly the same. Unless the employee agrees otherwise, the existing terms of employment continue.

As an employer, you can claim the CJRS yourself - your accountant doesn't need to do it, but if you ask them to, expect an additional fee to apply

Hopefully, the existing contract you have with the accountant states the cost of any changes you wish e.g. with regards to changes to payroll.

As with everything in business, negotiation is the key. It would be interesting how the accountant justifies a fee of £125 to simply change the weekly/monthly pay to an employee - they just need to go into their software and change the value

Similarly, why would an accountant charge £25 per employee per month extra during this period?
- once the employee's pay has been changed, then the work the accountant needs to do is exactly the same.

Time to consider changing your accountant if they are being stupid.

Btw, as a business, you should never put yourself in a postion where any supplier (in this case your accountant) has you over a barrel. Ensure you remain in control at all times if you wish to survive.

Nutmeg215

Jeremy535897 said:

By definition you will always be able to do things more cheaply yourself than if you hire someone else to do it. Perhaps you should handle the payroll yourself in future if you find it easy to do.

Of course, you are absolutely right, and I undoubtedly will from hereon. However, I had never been looking for my accountant to do the furloughing for me, I was already very happy to do it myself, and had told them so in the various emails I eluded to in my post, but as this firm have my HMRC PAYE online access (which I do not have), their responses came across more as a fait accompli, that they would have to claim on my behalf and thus I would HAVE to pay them for a service which I had not enlisted them to do.  

Since the situation with my Accountant started in March, I have spoken to many other small limited company owners, who are either being charged nothing extra from their Accountants for their own furloughing claims, or a minimal £5 or £10 per employee. I therefore felt a £300 set up fee and £50 per month fee thereafter somewhat excessive and exploitative.  My post was really to highlight to others that, if they too consider that they are being quoted a fee equating to a very large percentage of their overall claim, that it is possible to make the claim yourself.

Jeremy535897

It did surprise me a bit, as I think a lot of accountants are doing this sort of work without additional costs, seeing it as doing their bit to support clients. I wasn't being critical either. It is much better to do it yourself if you have the time and feel confident about doing it, unless you can earn more than their fees doing something else.

unholyangel

Nutmeg215 said:

Jeremy535897 said:

By definition you will always be able to do things more cheaply yourself than if you hire someone else to do it. Perhaps you should handle the payroll yourself in future if you find it easy to do.

Of course, you are absolutely right, and I undoubtedly will from hereon. However, I had never been looking for my accountant to do the furloughing for me, I was already very happy to do it myself, and had told them so in the various emails I eluded to in my post, but as this firm have my HMRC PAYE online access (which I do not have), their responses came across more as a fait accompli, that they would have to claim on my behalf and thus I would HAVE to pay them for a service which I had not enlisted them to do.  

Since the situation with my Accountant started in March, I have spoken to many other small limited company owners, who are either being charged nothing extra from their Accountants for their own furloughing claims, or a minimal £5 or £10 per employee. I therefore felt a £300 set up fee and £50 per month fee thereafter somewhat excessive and exploitative.  My post was really to highlight to others that, if they too consider that they are being quoted a fee equating to a very large percentage of their overall claim, that it is possible to make the claim yourself.

Are you sure its your PAYE online access they have? Agents have their own portal they use so an accountant having the employers PAYE online account would be unusual. 

You'd need to be registered for PAYE online as an employer to be eligible (although its not the only eligibility requirement) for the scheme, so it would be wise to check this. 

Nutmeg215

unholyangel said:

Nutmeg215 said:

Jeremy535897 said:

By definition you will always be able to do things more cheaply yourself than if you hire someone else to do it. Perhaps you should handle the payroll yourself in future if you find it easy to do.

Of course, you are absolutely right, and I undoubtedly will from hereon. However, I had never been looking for my accountant to do the furloughing for me, I was already very happy to do it myself, and had told them so in the various emails I eluded to in my post, but as this firm have my HMRC PAYE online access (which I do not have), their responses came across more as a fait accompli, that they would have to claim on my behalf and thus I would HAVE to pay them for a service which I had not enlisted them to do.  

Since the situation with my Accountant started in March, I have spoken to many other small limited company owners, who are either being charged nothing extra from their Accountants for their own furloughing claims, or a minimal £5 or £10 per employee. I therefore felt a £300 set up fee and £50 per month fee thereafter somewhat excessive and exploitative.  My post was really to highlight to others that, if they too consider that they are being quoted a fee equating to a very large percentage of their overall claim, that it is possible to make the claim yourself.

Are you sure its your PAYE online access they have? Agents have their own portal they use so an accountant having the employers PAYE online account would be unusual. 

You'd need to be registered for PAYE online as an employer to be eligible (although its not the only eligibility requirement) for the scheme, so it would be wise to check this. 

I am registered for PAYE online (otherwise I would not have been able to make the furlough claim directly with HMRC over the phone) but as I have always paid the Accountant to do all my submissions, I do not have a ‘Company’ Government Gateway Account, which you do need to fulfil your claim.  

I do not have an issue with claiming as HMRC were very helpful and I now know which department to ask for next month if I am still furloughed. My main issue and reason for posting was to highlight what I believed to be exorbitant fees to carry out an absolutely necessary task given the current situation and how I was made to feel like I HAD to use their services and that I shouldn’t, or even couldn’t, go through the process on my own, which is untrue and I simply wanted others to be aware that it doesn’t have to cost them either.