Is your standard accountant bill 100% tax deductable?

[WaterTight]

As in few hundred, you give them all your nicely ordered paperwork and spreadsheets, they fill in the return type thing?

 

[lame plumber]

wouldn't use on if they weren't deductable

 

[Chalked]

Yes......and no......

You pay him £500, that is an overhead. So is completely tax deductible. But you don't glaim £500. If you are are 20% payer, you will get back £100 off your tax bill.

But hopefully he/she will claim for more that you didn't know about, saving you a bit more.

 

[lame plumber]

it is an expense, which is removed from your gross profit to give you your net profit, which if that is over your tax allowance is then taxed at 20% unless your earn so much that you hit the higher tax bracket

 

[julesverne]

First year using an accountant wished id done it years ago. Just hand in my receipts/expenses invoices in no order and walk away they do it all. Saves me a boat load time and she saves me money.

 

[gassafe]

First year using an accountant wished id done it years ago. Just hand in my receipts/expenses invoices in no order and walk away they do it all. Saves me a boat load time and she saves me money.

Don't you keep any records? Must cost a lot to just hand it all in like that?

I'm self employed, keep all my books & receipts etc & just hand in to the accountant for the figures etc, he charges me 495 including vat!! I'm sure I'm getting done, as it can't take him that long surely??

 

[julesverne]

costs me 600 -700 quid a year. Im happy to pay that for the time it saves me.

 

[Chalked]

I pay £150 inc vat a month for all accounts, year end, tax , ltd co accounts and vat returns. I can ring anytime for advice . Just bought another buy to let and they did all the references with no charge.

 

[Ray Stafford]

You are good at plumbing. So do plumbing.

Accountants are good at bookkeeping*. So let them do bookkeeping.

Its called "the doctrine of comparative advantage". Link

*Bookkeeping and Bookkeeper are the only words in the English language that have three sequential pairs of double letters, without any interventing letters.

 

[Chalked]

You are good at plumbing. So do plumbing.

Accountants are good at bookkeeping*. So let them do bookkeeping.

Its called "the doctrine of comparative advantage". Link

*Bookkeeping and Bookkeeper are the only words in the English language that have three sequential pairs of double letters, without any interventing letters.

Just read that. Am no wiser.
I let the accountant do it, because I hate doing it.

 

[lame plumber]

I do my accounts ready for the accountant to do my returns because I can, bit sad if an ex Bursar didnt prepare his own accounts

 

[WaterTight]

Yes......and no......

You pay him £500, that is an overhead. So is completely tax deductible. But you don't glaim £500. If you are are 20% payer, you will get back £100 off your tax bill.

But hopefully he/she will claim for more that you didn't know about, saving you a bit more.

Yeah, so the money I put aside for tax, I can take it off that. That's what I want to confirm.

 

[hammers4spanner]

Blimey my accountant is only £300

 

[Rckape]

I thought my last one was pricey at £200 plus the dreaded!

I've moved accountant for this last one, he's still not told me how much he's charging but he's saved me a lot more tax than the previous one. Time will tell if it's saved me overall.

 

[Ray Stafford]

Yeah, so the money I put aside for tax, I can take it off that. That's what I want to confirm.

Imagine you had made £25,000 profit, and so you had set aside £5,000 for your tax bill. (20% of £25,000)

You now introduce a £500 accountants bill, so your expenses have risen by £500, and your profits are now £500 less - in this case, £24,500.

Your new tax liability is 20% of £24,500 is £4,900.

"100% tax deductible" does not mean that you can deduct the entire amount from your tax bill. It means that the entire amount is allowable as an expense when calculating your tax bill.

The actual saving to your pocket is only the £expense x your tax rate. In this case, £500 x 20% or £100 saving.

Using £500 worth of accountancy will cost you £400 after tax, unless his more experienced eye finds other ways to save you tax.

 

[lame plumber]

the way I judge value for money with an accountant is that I work out my tax liability, have that figure in mind and then see that his returns show a reduced tax liability, thus far, he has managed to do so, apart from last year when I earned far more than normal, but failed to set aside enough, stung a bit after Xmas totally my fault, the mrs found the little extra in my reserve account, not make that error again

 

[cr0ft]

I'm interested in this. Never used an accountant so far to be honest. We have a fairly small plumbing business that will probably turnover £200K + VAT this year. I claim all my expense back against profit and own our own vehicles. I can complete a tax return in a couple of hours. Will an accountant really save me their fee in tax??

 

[Chalked]

I'm interested in this. Never used an accountant so far to be honest. We have a fairly small plumbing business that will probably turnover £200K + VAT this year. I claim all my expense back against profit and own our own vehicles. I can complete a tax return in a couple of hours. Will an accountant really save me their fee in tax??

Do you claim relief on depreciation on vehicles and tools. Is your wife using all of her tax allowance. Are you claiming for an office, or area of your home for office use.
I can ring my accountant any time for advise, from the best way to finance a van. Or how to reduce tax liability in other ways.

If I were you I would add some local tradesmen who they use and pop in and have a chat with thier accountant.

 

[julesverne]

I'm interested in this. Never used an accountant so far to be honest. We have a fairly small plumbing business that will probably turnover £200K + VAT this year. I claim all my expense back against profit and own our own vehicles. I can complete a tax return in a couple of hours. Will an accountant really save me their fee in tax??

Not only money but the time saved for me not having to do my books is worth the money alone.

 

[mfgs]

I pay £150 inc vat a month for all accounts, year end, tax , ltd co accounts and vat returns. I can ring anytime for advice . Just bought another buy to let and they did all the references with no charge.

I have the same set up where I pay them every month and they deal with it all, very handy and saves me the time and having to worry about it. My accountant gets sent my business bank statement, along with any cash sales which I note down for him. From this is sort out everything including CIS returns for subcontractors. Its the best thing I have done since I set up my company.