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Setting up small Ltd business - reasonable accountancy fees?

steviewander2000
Posts: 4 Newbie

in Cutting tax
Hello,
I am considering moving from a sole trader status to setting up a Ltd company business as a sole director. I have been advised that it is a a more tax efficient way of paying myself a pension through the company rather than personal contributions as a sole trader. Building up the pot fast is my main priority having only set up a pension rather late in my 40s. A prospective accountant has given me an estimate of fees which are:
- a one off set up fee of £200 + VAT
- annual service of costs £600 + VAT
- monthly fee the pay roll and issuing wage slips of £28. + VAT
Do these fees sound reasonable or are they excessive?
Thanks in advance.
I am considering moving from a sole trader status to setting up a Ltd company business as a sole director. I have been advised that it is a a more tax efficient way of paying myself a pension through the company rather than personal contributions as a sole trader. Building up the pot fast is my main priority having only set up a pension rather late in my 40s. A prospective accountant has given me an estimate of fees which are:
- a one off set up fee of £200 + VAT
- annual service of costs £600 + VAT
- monthly fee the pay roll and issuing wage slips of £28. + VAT
Do these fees sound reasonable or are they excessive?
Thanks in advance.
0
Comments
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First two look reasonable if not cheap. Payroll cost looks extortionate.2
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Pennywise said:First two look reasonable if not cheap. Payroll cost looks extortionate.1
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looking at the package price of accounts + payroll @ £936 + Vat per year that is slightly low to bottom of average.
However, as others say, taken individually the payroll cost is huge.
For example, I know people paying £10 for single person payroll, but that is as an add on to the accounts cost, so the overall package price is back to around £900 - £1,000. As I'm sure you appreciate, accountants are no different to other businesses when pricing, they have some "enticing" items and some fat items mixed as a package on the basis it can be more awkward to get items done individually by different suppliers. Yes there are loads of payroll companies out there but your accountant is pitching on the basis a "one stop shop" may have "value" convenience and so he is profiting (price inflating) on that aspect1 -
No reason you can't administer the payroll yourself. Hmrc provides free software for firms with only a few employees, called "Basic PAYE tools -RTI", since this year it also produces payslips for you. It isn't difficult and hmrc produces YouTube videos for guidance and runs webinairs to assist.I'm a Forum Ambassador on the housing, mortgages & student money saving boards. I volunteer to help get your forum questions answered and keep the forum running smoothly. Forum Ambassadors are not moderators and don't read every post. If you spot an illegal or inappropriate post then please report it to forumteam@moneysavingexpert.com (it's not part of my role to deal with this). Any views are mine and not the official line of MoneySavingExpert.com.2
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It costs less than £20 to buy a company directly from Companies House and takes about 5 minutes. (When I did mine in 2016, it cost £12.50.)
For a one-stop, all inclusive service, the other fees look reasonable. When I worked in an accountancy practice in the mid-1990's, we charged £240/quarter plus VAT for a service which included payroll, director's tax returns, VAT services, company statutory accounts, HMRC and Companies House filings.
HTH
- Pip"Be the type of woman that when you get out of bed in the morning, the devil says 'Oh crap. She's up.' "
It ain’t what you do, it’s the way that you do it - that’s what gets results!
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setting up a ltd company costs c.£20
depending on the complexity of your business accounting is actually quite simple, £600 per year seems a lot for something that can be done with Excel0 -
I would say 600 pounds sounds good, But depends on your turnover, I've seen accounts charge triple that. If you give your accountants an organised excel spreadsheet with expenses folder to boot, they may discount you.
but yes you could do it yourself and file accounts with companies house and HMRC, personal choice, I left those to my accountants to do"It is prudent when shopping for something important, not to limit yourself to Pound land/Estate Agents"
G_M/ Bowlhead99 RIP0 -
nerox said:depending on the complexity of your business accounting is actually quite simple, £600 per year seems a lot for something that can be done with Excel0
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nerox said:setting up a ltd company costs c.£201
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csgohan4 said:I would say 600 pounds sounds good, But depends on your turnover, I've seen accounts charge triple that. If you give your accountants an organised excel spreadsheet with expenses folder to boot, they may discount you.
but yes you could do it yourself and file accounts with companies house and HMRC, personal choice, I left those to my accountants to doPennywise said:nerox said:setting up a ltd company costs c.£20
Something else to consider is the "Making-Tax-Digital" requirement for limited companies. It will soon be very difficult to just keep your books on a spreadsheet and then enter the numbers into the form on HMRC's website which generates/submits your statutory accounts together with creating the company's tax computation.
I think the proposed fee is quite reasonable.
- Pip"Be the type of woman that when you get out of bed in the morning, the devil says 'Oh crap. She's up.' "
It ain’t what you do, it’s the way that you do it - that’s what gets results!
2025 Fashion on the Ration Challenge 66 coupons - 30 spent.
4 - Thermal Socks from L!dl
4 - 1 pair "combinations" (Merino wool thermal top & leggings)
6 - Ukraine Forever Tartan Ruana wrap
7 - Nobody’s Child brand Blue Cotton Denim Midi Dress from M&S
16 - 4 x 100g/450m skeins 3-ply dark green Wool Local yarn1
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