Accountant overcharging?

B

buckrodgers

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I asked my accountant for a quote to cease my business. They told me it would cost €1,750 plus €138 outlay for newspaper advertisement plus VAT at 21%. This seems very expensive to me. Does anyone have any advice about the cost - is it expensive, can I do any of it myself.

This is what they said they would do:

In order to strike off the company we would need to do the following:
1. Apply for audit exemption before 31 March 2007.
2. Prepare Financial Statements for the year ended 31 March 2007.
3. Prepare the Corporation Tax Return for the year ended 31 March 2007.
4. Cancel all tax registrations with effect from 1 April 2007.
5. Inform the Companies Office and the Revenue of the intention to strike
off the company.
6. If the company will be struck off before 31 December 2007, there will be
no need to file the Annual Return and abridged Financial Statements.

Provided the books and records are kept properly and that there are the
same or fewer transactions in the final year.
 
Not a bad fee for all that is involved. Don't even attempt it yourself? What fee did you pay for the previous years accounts?
 
Well it doesn't sound exorbitant, but perhaps money is tight as the business winds up?

How much more than the usual annual accountant fee is this? You would would have been preparing the Financial Statements and CT returns anyway.

In regard to the windup procedure, you may qualify for the audit exemption anyway. And if your if your tax affairs are up to date, you have no creditors or assets, and you have ceased trading, you can apply for voluntary strikeoff, which you certainly can do yourself.

More info at the [broken link removed].

There may be other conditions you have to meet, so check it out.
 
I feel I got bad advice from this accountant from the start. I was going to set up as a sole trader and went to the accountant for some advice. I had three of them come in to me telling me how much better it would be for me to set up as a ltd. company. The failed to tell me any of the drawbacks. They then never told me I had to have my accounts in by a certain date or I would loose my audit exemption. Needless to say I missed the date and even though I had very little accounts I have still ended up paying them 3000 a year for the last two years to audit my accounts. I really dont want to give them another penny. I just want to get rid of this business as quickly and cheaply as possible. It has cost me a lot of money allready and I would have to get a loan out to close it.
 
"They then never told me I had to have my accounts in by a certain date or I would loose my audit exemption. Needless to say I missed the date ....."

I have missed CRO filing deadlines myself in the past - so I do have sympathy. However, I would not dream of blaming the accountant. I don't want to sound mean, but this just doesn't wash as an excuse. The Companies Registration Office would have sent you letters explaining your responsibilities in great, but clearly written, detail. It just isn't fair to blame the accountants for the fact that you missed a filing deadline.

Incidentally, if the company is not trading, you could just keep filing (on time!) your audit-exempt annual returns for a few euro per annum. You might find a use for the company some time in the future.
 
extopia said:
Well it doesn't sound exorbitant, but perhaps money is tight as the business winds up?
Click to expand...


Maybe money is tight as the business is winding up, but that should not be a reason for an accountant to reduce their fees.
 
I didnt say the accountant should reduce their fees, I just thought they were expensive. Having never dealt with accountants before I am quite shocked by what they charge. When he gave me that quote I thought, niavely it seems, that this was a huge amount.
When you say it would only cost a few euros a year to keep it open how much do you mean approx.
As for blaming the accountants - I do blame them - they knew I didnt have a clue about the accounts side of things, I made that planely clear. They assured me that they would take care of everything. They even said and I quote "A good accountant will make you money not cost you". So far they have cost me close to €8000 in fees for a company that should never have been set up. If I hadnt listened to them I would have set up as a sole trader and not have had all this hassle. Please excuse me if I sound ratty but I have just paid them €3000 and now I have to find another €2000 from somewhere just to get rid of a company that lost me thousands.
 
Hi buck

It's probably no consolation to you, but a lot of accountants suggest setting up a limited company. A lot of other accountants strongly disagree with it.

Your case is one of the very good reasons why people should continue to trade as a sole trader and not incorporate.

Ask your accountant about the voluntary wind up option.

You should also put your complaint to them in writing and ask them, under the circumstances, to wind up the company free of charge for you.

Brendan
 
"When you say it would only cost a few euros a year to keep it open how much do you mean approx. "

If the company is not trading, and if it qualifies for audit exemption, then the actual cost is just the filing fee for the annual return (about €40 I think). You might need a bit of professional help doing a 'non-trading' annual return and accompanying balance sheet, but once you have done one, you will be able to do the next without any problem.
 
i have to say i very very rairly advise a client to set upas a company to start with unless there is a dam good reason
 
Brendan said:
Ask your accountant about the voluntary wind up option.
Click to expand...
Brendan,

The OP has already clearly stated that they are availing of this option!

buckrodgers said:
I asked my accountant for a quote to cease my business. They told me it would cost €1,750 plus €138 outlay for newspaper advertisement plus VAT at 21%. ...

This is what they said they would do:

In order to strike off the company we would need to do the following:
1. Apply for audit exemption before 31 March 2007.
2. Prepare Financial Statements for the year ended 31 March 2007.
3. Prepare the Corporation Tax Return for the year ended 31 March 2007.
4. Cancel all tax registrations with effect from 1 April 2007.
5. Inform the Companies Office and the Revenue of the intention to strike
off the company.
6. If the company will be struck off before 31 December 2007, there will be
no need to file the Annual Return and abridged Financial Statements.
Click to expand...

Brendan said:
You should also put your complaint to them in writing and ask them, under the circumstances, to wind up the company free of charge for you.
Click to expand...
Does your own business often waive its charges to dissatisfied customers?
 
jem said:
i have to say i very very rairly advise a client to set upas a company to start with unless there is a dam good reason
Click to expand...

As an accountant myself, I find myself regularly trying to persuade people NOT to form companies. Sometimes, people insist on forming a company even when it is perfectly clear to me that it is pointless or likely to be counter-productive. Sometimes people have their minds made up, or worse still, their company actually formed, long before they go to me for advice. Here is one example from AAM today: http://www.askaboutmoney.com/showthread.php?t=49609

A lot of company owners were caught badly with filing fees & compulsory audits in the 2001-03 period after the CRO overhauled their filing enforcement regime in September 2001. The new "zero tolerance" policy was very badly publicised at the time and many people only found out about it when they already owed thousands in filing fee arrears.

I would have a lot less sympathy for anyone caught more recently as the CRO have been heavily advertising the need to file annual returns (including advance warning notices being posted each year to every company on record). Accountants and other professional advisers have also generally been very careful to warn their clients of the implications of late filing, because late filing tends to cause as many headaches for the accountant as for the company directors.

Even if an accountant fails to get the message to a client (for whatever reason), the responsibility remains with the directors to keep the company's affairs in order. Company directors sign up to a whole array of responsibilities when they agree to become directors in the first instance. If they fail to comply with company law, they may well try to blame their accountant.If they fail to comply with banking covenants, they may well try to blame the Bank Manager. If they fail to comply with tax rules, they may well try to blame the Revenue. If they fail to comply with waste regulations, they may well try to blame the EPA or the council.

Bottom line in all scenarios, the buck stops with the company directors.
 
MOB said:
If the company is not trading, and if it qualifies for audit exemption, then the actual cost is just the filing fee for the annual return (about €40 I think). You might need a bit of professional help doing a 'non-trading' annual return and accompanying balance sheet, but once you have done one, you will be able to do the next without any problem.
Click to expand...

If the OP has already failed to properly manage their ARD Date obligations, I'm not sure this would be good advice. Another missed ARD would expose them to an automatic "€100 + €3 per day" fine plus another 2 years compulsory audits plus increased risk of prosecution or disqualification for persistent non-compliance.
 
Thank you to everyone for their advice. I have deceided to get a loan and pay for the company to be wound up asap.
 
It's probably worth if you were going to have to pay most of the quoted amount anyway for your annual accounts preparation. Just for the record, can you verify how much "extra" the accountant was charging for the wind-up?
 
Do you use a computerised accounts system? - or are your books all over the place?
 
You appear to have a March 07 year end and a December 07 ARD.

Firstly, if your accountants are quoting to apply for audit exemption before March 07, you must have filed on time last year (otherwise you could not apply this year). Application for Audit exemption (AE) is only a Board minute, and a letter to your accountants advising them of this. They then must write to you to notify you that they have no issues with this, and then copy that letter to the CRO. In any event there is no requirement to apply for AE if you are going to go for Voluntary Strike Off (VSO), except to save costs on preparing your final accounts up to date of cessation of trading.

Secondly, you have loads of time! If your next ARD is not until Dec 07, you have until 28th January 2008 to file your VSO application. All you need to apply for VSO are the following:
(1) the co must have no assets or liabilities;
(2) it must be up to date with teh Revenue Commissioners (ie, notify the Revenue that teh company has ceased trading with effect from xxxx date, and request a letter of no objection to VSO. The rev will the write back with either teh letter you need, or a list of any outstanding matters which need to be concluded.
(3) You must be up to date with teh CRO (it doesn't matter if you were late previously)
(4) You must confirm that you do not intend to recommence trading, and
(5) Once you have the Revenue letter, you must place a newspaper ad in one daily national newspaper.

Job done! The only reason you may need your accounts is for teh Revenue to accompany any outstanding CT returns. If they are to be AE accounts, they should be a lot cheaper than audited, but it also depends on the quality of your records and teh level of trading.

PM me if you need any template documents to start the ball rolling.
 
I didnt ask them how much the accounts would cost to do normally. I use a computer template that the accountant gave me. They insist the accounts are done on this. I have very little accounts for this year - it would all fit on one a4 sheet. I dont intend having anymore transactions. I thought if I didnt cease by the 1st of April that I would have to provide another years accounts. I have an overdraft with the bank which I plan to take over, no other liabilites.
 
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