Are online accountants any good?

dllive

Hi,

Ive been using the same accountant for 10 years. I have very simple accounts and I give them my details in a very clear spreadsheet together with digital/paper receipts. Over the past couple of years their service has deteriorated somewhat and yet their fees go up each year. I currently pay them £270.

So Ive decided to look for alternatives.

Has anyone experience of online accountants such as https://fixedfeetaxreturn.co.uk/ ? As I say, my accounts are very straightforward (I have income from freelance work and a rental property. No company cars, Limited company or anything like that).

Any recommendations or guidance gratefully received.

Thanks

Sandtree

If you are a sole trader with simple accounts why use an accountant at all? Self Assessment returns are intended to be able to be done by the person themselves (you'd argue hence the "self" element).

I am sure there are some online accountants that are great, I am sure many others simply get you to fill in a digital form that passes the data straight through to HMRC with no value add. Given you are sending receipts etc it sounds like your current accountant is doing some book keeping or validation... is your proposed accountant going to be doing the same? They may be cheaper because they will be doing less which begs the question of if you need your current accountant to be doing as much.

£270 isnt cheap but its not very expensive either, depending where in the country they are based. 

Savvy_Sue

DS1 uses one and is happy but he's in a niche line of business so helps to have a specialist.

I can see Sandtree's point, but you may need help with what's allowable and what's not on the property side. As I understand it, it's not always straightforward. 

Pennywise

Not sure there is any difference between "online" and "bricks n mortar" accountants these days.  Most accountants do both.  The actual work done is the same.  I'd say £270 is a pretty good price for a tax return for both self employment and a property - that's the main return plus 2 supplementary sections.  If you're not happy with the service, then that's enough reason to look elsewhere, but be wary of going for cheap.  Also be wary that literally anyone can call themselves an accountant and set up an accountancy practice - no qualifications/experience required, so check out their credentials, i.e. that they're regulated/supervised by a proper professional body.

oldbikebloke

as Pennywise says, £270 for a tax return of your "complexity" is not that expensive.
Online accountants are no different to bricks and mortar, if you do most of the input work their price will reflect that, if you don't then an "online" accountant will require you to provide the info anyway so they can input it - at your cost 

dllive

Sandtree said:

If you are a sole trader with simple accounts why use an accountant at all? Self Assessment returns are intended to be able to be done by the person themselves (you'd argue hence the "self" element).

I am sure there are some online accountants that are great, I am sure many others simply get you to fill in a digital form that passes the data straight through to HMRC with no value add. Given you are sending receipts etc it sounds like your current accountant is doing some book keeping or validation... is your proposed accountant going to be doing the same? They may be cheaper because they will be doing less which begs the question of if you need your current accountant to be doing as much.

£270 isnt cheap but its not very expensive either, depending where in the country they are based. 

I did try to submit my SA once, but the online form didnt work and was so cumbersome! Im sure - after a year or 2 - its easy enough to do. But also someone said that you would have less chance of being investigated if you had an accountant because HMRC would presume that they had filed the accounts correctly. I dont know if theres any truth to that!

I dont know what bookkeeping is. Perhaps thats what Im doing: I have a spreadsheet detailing all incoming and all outgoings. Very simple. I just hand this to the accountant - together with the corresponding invoices/receipts.

Im in Devon, so not sure if £270 is reasonable(?). I dont mind paying a slight premium for the peace of mind of being able to call or have a quick face-to-face meeting if I need to, but their response times have really slowed down. (My last follow-up email to them was 4 weeks ago!)

dllive

oldbikebloke said:

as Pennywise says, £270 for a tax return of your "complexity" is not that expensive.
Online accountants are no different to bricks and mortar, if you do most of the input work their price will reflect that, if you don't then an "online" accountant will require you to provide the info anyway so they can input it - at your cost 

I suppose my reticence about online firms is the inability to go into a physical office to see them. Having said that, Im now not able to do that with my current accountant!

Is it easy to move accountants? (My current accountant has all my hardcopy receipts etc...). Do accountants usually charge an 'exit fee'?

Sandtree

dllive said:
But also someone said that you would have less chance of being investigated if you had an accountant because HMRC would presume that they had filed the accounts correctly. I dont know if theres any truth to that!

I dont know what bookkeeping is. Perhaps thats what Im doing: I have a spreadsheet detailing all incoming and all outgoings. Very simple. I just hand this to the accountant - together with the corresponding invoices/receipts.

I am not sure that having an accountant reduces your risk of HMRC deciding to have a closer look at you. There are accountants that promote very aggressive approaches which probably go far beyond what the average person would consider on their own.

Bookkeeping is doing the basics, transcribing and classifying receipts, checking receipts and bank statements against the accounts, digitising receipts etc... basically all clerical stuff. If you and the accountants are both big enough then you pay one rate for that sort of work and the much higher rate for the proper accountancy work but if you're a small/simple then you often get everything charged at the accountancy rates.

dllive said:
I suppose my reticence about online firms is the inability to go into a physical office to see them. Having said that, Im now not able to do that with my current accountant!

Is it easy to move accountants? (My current accountant has all my hardcopy receipts etc...). Do accountants usually charge an 'exit fee'?

Most online firms do ultimately have an office somewhere, some you can go and visit (outside covid restrictions etc)

Why do you send the hard copy of receipts to your accountants? I've used a number of accountants for various ventures over the years, most being specialists in my field at the time, and none have wanted the receipts at all let alone hard copies other than by exception. 

If they are doing work for you they'd be entitled to charge for their time or facilities, if they will you'd need to speak to them about

dllive

Sandtree said:

Why do you send the hard copy of receipts to your accountants? I've used a number of accountants for various ventures over the years, most being specialists in my field at the time, and none have wanted the receipts at all let alone hard copies other than by exception. 

Im not sure TBH! I suppose its just something Ive always done. I just bundle everything up neatly (digitally and in paper form) and give it to them. 

oldbikebloke

dllive said:

Sandtree said:

Why do you send the hard copy of receipts to your accountants? I've used a number of accountants for various ventures over the years, most being specialists in my field at the time, and none have wanted the receipts at all let alone hard copies other than by exception. 

Im not sure TBH! I suppose its just something Ive always done. I just bundle everything up neatly (digitally and in paper form) and give it to them. 

Obviously if your accountant has the paperwork they can check to it, whether you pay them enough for them to spend time doing so is an unknown. Your contact with them will doubtless contain some caveats about the "quality" of the info you provide (your bookkeeping) and their "liability" based on what they receive and whether they commit to checking it.
Paying for a tax return does not automatically mean you paid someone to check that the info provided agreed to its source paperwork. The tax return is about putting numbers in boxes, not checking the number is correct in the first place.

That said, your comments show you are not getting the level of service you want, therefore yes, move accountants, it is easy, there are (normally) no exit charges (read your contract in case your accountant slipped them into it) and you may get the level of service you want for a similar price. 

However, please be aware that many online accountants will expect you to populate an accountancy system for them yourself - ie do your own bookkeeping direct into one the very many packages on the market (FreeAgent, Xero, Sage, Quickbooks etc etc). If that is the case, please make sure you understand that commitment as some packages are much easier to use than others...

What happens to your paperwork after moving to a new accountant is down to you to decide. The old accountants may agree to retain it, or they may require you to collect it - after all paper takes storage space and that costs money. It is not beyond the realms of possibility that even for "only" £270 they have simply matched your papers to your digital copies to ensure it is complete and then thrown away the paper as it serves no purpose and thus does not need to be stored as hardcopy.

dancing_star

I think £270 is fine for a TR with property income. I'm in a rural practice and that's give or take about what we'd charge. Also you say the prices rise each year, but so do salaries, overheads etc. Your costs of living rise, therefore your accountant's cost of providing services will too.

I also have to say that you may think your spreadsheets are great and your systems helpful, but they might not be as wonderful as you think. I could tell of numerous times I've had to unpick a client's excel sheets when they've made a hash of auto-sums, put text in instead of numbers, netted off income and expenses incorrectly and so on. What makes sense to you might not be most efficient for your accountant and sometimes a client's effort to help is more of a hindrance.