Accountancy fees for Sole Trader?

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LadyJane

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How much should one pay for an accountant to do the year end? The business is a sole trader, not vat registerested (upon accountant's advice). Service based industry with 3 major clients only. Turnover about 45-50k. All information goes over to the accountant in spreadsheets (invoices, receipts, purchases etc) and bank statements provided.

The accountant registers the return online and then provides a print out of the accounts. The fee was 1,200.00

I feel this is steep for what I assume is a very simple job. Any ideas as to whether or not this is reasonable? Also I get very tardy, rude service, so I am looking to find a new accountant anyway.

What is a reasonable amount to pay?
 
That sounds very high. Our business sounds very similar to yours and our fee was 500 euro for the year, and that included the personal tax for the two partners too.
 
I think the VAT registration threshold for a service company is €37,500 per year so you may want to check out your position. (It is €75,000 for supply of goods).

Also, if your 3 major clients are VAT registered, you should be registered as there will be in effect not cost increase to your clients but you will be able to reclaim VAT on your business expenses.

Edit - Just saw that I gave same feedback to LadyJane's Query in 2008 - There must be a reason for not needing to register for VAT. On a plus side - income seems to be holding up well!
 
Paddi22,

€500 for year end accounts and 2 directors tax returns! Thats an incredible price. It should cost you that for just the directors tax returns. The accounts must be extremely simple and he must give no advice (or at less he does not value advice he gives you)

If he is giving on-going advice, Corporation tax returns, company secretarial returns, full set of accounts, abridged accounts I think €1.2k is reasonable.
 
Paddy199 said:
Paddi22,

€500 for year end accounts and 2 directors tax returns! Thats an incredible price.

The post stated partners and personal tax returns. This may not have been a company. Still good value. For a sole trader not VAT registered with this level of t/o I would charge €500 - €600 plus VAT assuming good books and good co-operation from the client. For a partnership with double this t/o I would charge €750-€950 plus vat assuming co-operation, good books and no other income streams.
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I am a one-man-band so to speak, so really there is not much for the accountant to do. About the VAT - I am not sure about that. I don't buy anything in really so registering isn't going to be a benefit to me. My clients are VAT registered so it is no benefit to them either way. I will check with my new accountant. I don't pay corporation tax, just Income Tax, PRSI.

QED - if you gave similar advice in 2008 it must have been good! Although I haven't changed accountants since I started out, I always thought I was paying over the odds considering my business is extremely simple. Now everything needs to be tightened up and I think the accountant will need to be shopped.
 
Income c. €50K and small number of invoices, service , sole trader €600 or so +VAT would be about right, you should also expect to get timely submission and the occasional smile ;) .

Unless you are in a VAT exempt activity ( which may be the case from what previous posters have said) €50K turnover is over the VAT registration threshold for services and must be checked into. Remember regardless of the clients being VAT registered and no loss to Revenue had you been registered, they can look for the VAT which ought to have been charged if the trader is over the threshold and has not registered.
 
Paddy199 said:
Paddi22,

€500 for year end accounts and 2 directors tax returns! Thats an incredible price. It should cost you that for just the directors tax returns. The accounts must be extremely simple and he must give no advice (or at less he does not value advice he gives you)

If he is giving on-going advice, Corporation tax returns, company secretarial returns, full set of accounts, abridged accounts I think €1.2k is reasonable.
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heya, as someone mentioned above we are a partnership, so a lot less paperwork than a limited company. We also file everything very carefully to cut down work for the accountant, and I do the mid year vat stuff.

Saying that, they are very generous with any queries we have have and we never feel rushed or ignored even though we are a small company. Our acountants are a husband and wife team with a small office, so I imagine they don't have huge overheads and can offer a good price.
 
Partnership accounts, year end VAT return, partnership allocation of profits calculation, Partnership tax return Form 1A, 2*Form 11's, posssible rental computation if parters rent premises to partnership, correspondence, advice.

Are they really doing all this for €500? Maybe they are checking your figures and just doing your 2 directors tax returns with a small bit of advice / correspondence. Check and see if Form 1A's have been submitted to Revenue under your Partnership VAT number. I doubt it.
 
I don't know what a fair price is - that is why I posted the original question. I know what a fair price for milk is because I can compare and contrast easily between different suppliers. Here, I could be metaphorically paying 10 euro for a pint of milk - or it may be reasonable. The only way I know of to find out about reasonable accountancy costs is to ask other small business owners, as accountants don't post the prices above the door, so to speak.
 
paddi22 said:
That sounds very high. Our business sounds very similar to yours and our fee was 500 euro for the year, and that included the personal tax for the two partners too.
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I could subcontract all my work to this firm and simply review end product and still make a healthy profit. It costs me much more to pay staff than they are charging. They are pure mad and will probably make themselves sick if they continue charging at this rate. I calculate they are earning just about €10 an hour.
 
simplyjoe said:
I could subcontract all my work to this firm and simply review end product and still make a healthy profit. It costs me much more to pay staff than they are charging. They are pure mad and will probably make themselves sick if they continue charging at this rate. I calculate they are earning just about €10 an hour.
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To put it in context, we are a small firm (partnership) - working from home, with no rental premises or staff. We would send about 30 invoices per year and keep our receipts etc very well filed, and follow an excel spreadsheet they gave us. So I imagine we are possibly the simplest style of company an accountant can have!
 
paddi22,

€500 is still outrageous.

Tax work is the biggest area of litigation for accountants. All tax related work must be priced accordingly for the security this gives the client.

Also, tax professionals must attain a qualification and obtain ongoing training to keep upto date. For example, on partnerships, undistributed partnership profits are now fully taxed from 1 January 2007. Can you imagine the cost of making a mistake with this change of legislation?

Accountants must also attain a qualification and obtain ongoing training for the rest of their lives.

While I do accept your point that the info you provide them is neat etc, they still have to make 3 tax returns for you (Form 1 and 2*Form 11). Maybe they look at the VAT and PAYE for you aswell - I don't know.

I don't mean to take this out on you but I hate to see the professions degraded like this. They are undervaluing their work.

Finally, new legislation is being currently drafted (with the increase in audit exemption thresholds) to define an accountant. These 'accountants' will become bookkeepers which will improve the profession again.
 
Paddy199 said:
paddi22,

€500 is still outrageous.

Tax work is the biggest area of litigation for accountants. All tax related work must be priced accordingly for the security this gives the client.

Also, tax professionals must attain a qualification and obtain ongoing training to keep upto date. For example, on partnerships, undistributed partnership profits are now fully taxed from 1 January 2007. Can you imagine the cost of making a mistake with this change of legislation?

Accountants must also attain a qualification and obtain ongoing training for the rest of their lives.

While I do accept your point that the info you provide them is neat etc, they still have to make 3 tax returns for you (Form 1 and 2*Form 11). Maybe they look at the VAT and PAYE for you aswell - I don't know.

I don't mean to take this out on you but I hate to see the professions degraded like this. They are undervaluing their work.

Finally, new legislation is being currently drafted (with the increase in audit exemption thresholds) to define an accountant. These 'accountants' will become bookkeepers which will improve the profession again.
Click to expand...

There are many 'accountants' out there who are
- not members of regulated bodies
- have not sat professional examinations
- do not have to do continuing professional development
- have no professional indemnity insurance
Perhaps, when the term 'accountant' is formally defined as is the term 'auditor' there will be adjustments in the market and fees. Those persons who are not regulated continually have a competitive advantage over those who have to pay up for institute, iaasa, cpd pii etc. and while some charge less than regulated firms, some are charging similar rates.

I am not suggesting that the fee of €500 quoted is given by an unregulated, unqualified person. Merely that such quotes do occur.
 
Fair play to the guy thats getting his partnership fees at €500. If they are regulated then fine. I have recently got two clients from the same unqualified 'accountant'. The standard of work done by this firm was unbelievably poor. When the clients informed them that they were leaving the firm charged them treble what they charged in prior years for work that they had done. They had not finalised the accounts. They now will not release the information to us to carry out subsequent years accounts and we have no way of forcing them to do so. If they were qualified a simple phone call or letter to their institute would allow us to take over from the last filed set of accounts leaving my clients and the old firm to argue about the price of the work done. This is extremely unjust. The delay has also caused our clients to be late in submitting their accounts incurring late filing penalties and audit fees for two years. The only way for our client to get justice is to go to court. How expensive and slow is this process!! The system is a joke. The same two clients were also audited by a third party thru the unqualified firm despite they being exempt for at least 3 years prior. No body told them. A rip off again.
 
I have read through this thread and I must say I'm surprised by some of the reaction to the €500 accountancy fee. Take the scenario that has been outlined by the OP.Accountant has no VAT returns, invoices & receipts neatly presented, tax returns submitted through ROS - all in all no more than 2/3 days work. Even €500 is more than enough for that amount of work IMHO.
 
What nonsense. At this rate the accountant would earn €36,000 per annum before expenses, computer, stationery, postage, professional indemnity insurance, insurance, professional subscription, continuing professional education, library, professional magazines, advertising, travelling costs, repairs. Not a great return for someone who probably only stopped their education at the age of 24 or 25 years.
 
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