Pay less for Accountant's Fee

I was an employee with a company for two years before being made redundant last December 2008. Up to November 2007 I was a business consultant with a turnover of approx. €40k-€45k per annum. My accountant's fee; dealing with bookkeeping, VAT returns, P60, Personal Taxation and end-of-year accounts was €1,800.
Since January 2009 I have been operating as a business consultant and but due to the present climate, my turnover has been drastically reduced, approx €1,750 to date. I have supplied monthly expenses to date to my accountant but he has asked for the same fee of €1,800 up to the close of this tax year.
I have also been advised that my accountant's fee is tax deductible so if I am being taxed at 41%, the real cost of the fee is approx. 50% of what he has quoted me. Should I not be paying him less and if so what is a reasonable amount for turnover of €2000 to the end of the 2009 tax year?

Can I ask were you trading as a sole trader or as a limited company ?

This is a bit of a general answer - When an accountant is looking for a price for doing some work the first thing id check was turnover as the fee will be related to that (i.e the amount of work in it - large turnover might mean lots of transactions etc).

After that its complexity, has the client filed regular returns, when was the last return.

If theres only 2k Turnover and everything else is up to date i cant imagine there is a huge amount of work in it - the caveat being that this depends on no unforseen works cropping up, or previous returns

Id say sit down with the accountant and have a chat, go through what you need and youll probably come to some arrangement

I can empathise with you John. The thing is, your accountant will charge you based on his time and not on your turnover. I remember someone once saying to me "I can't believe I have have to pay you more than the taxman!", so I had to explain to this person that accountants don't charge on a commission basis...

If the time for your accountant to prepare everything hasn't been drastically reduced, then you couldn't expect the fee to drop much. That said, I'm surprised the accountant hasn't dropped it slightly to make some sort of gesture.

In answer to your question about a reasonable fee for €2,000 turnover... If your current accountant has kept the same fee, I'm assuming you're still Vat registered so there would be 2,3 or 6 Vat returns to file along with your Form 11. If you're a limited company, there is the CT1, P35 and the CRO filings. These things all still have to be done, it's just unfortunate that the numbers enclosed on them have deteriorated.

If you're a limited company, do the financial statements from your current accountant include an audit report? If so, you really should exercise your right to the audit exemption. You may be paying for an audit that you don't need.

I would quote you €900 + Vat for a sole trader €1,300 + Vat for a limited company based on the information provided.

John Stone said:

I was an employee with a company for two years before being made redundant last December 2008. Up to November 2007 I was a business consultant with a turnover of approx. €40k-€45k per annum. My accountant's fee; dealing with bookkeeping, VAT returns, P60, Personal Taxation and end-of-year accounts was €1,800.
Since January 2009 I have been operating as a business consultant and but due to the present climate, my turnover has been drastically reduced, approx €1,750 to date. I have supplied monthly expenses to date to my accountant but he has asked for the same fee of €1,800 up to the close of this tax year.
I have also been advised that my accountant's fee is tax deductible so if I am being taxed at 41%, the real cost of the fee is approx. 50% of what he has quoted me. Should I not be paying him less and if so what is a reasonable amount for turnover of €2000 to the end of the 2009 tax year?

Click to expand...

If you are a company:
The real cost is only reduced by 12.5%.
Even then it is only reduced if the company makes a profit.
If the company doesn't make a profit the real cost is the actual figure on the invoice.

I negotiated with my accountant this year and he dropped his fee by 25%. I am a sole trader.
In return for this I have agreed to do all of the book keeping and present him with all my data in a far clearer fashion than I had been, thus his volume of work is reduced.
Talk to your accountant....