Bookkeeping client who is an IFA - The Book-keepers Forum (UK)

KMBookkeeping · Member

Bookkeeping client who is an IFA

AC · Veteran Member

KMBookkeeping wrote:
I am a self employed BK and have been asked to quote on bookkeeping and quarterly VAT for an independent financial advisor trading as a sole director ltd company
Income and outgoings very straightforward from preliminary chat and VAT is currently being done by the accountant supplying stat accounts and is being charged fairly heftily for just the BK and VAT return element
I'm due to have a call with potential client to discuss this week and as I have never supplied BK to an IFA before then I just wanted to double check if there is anything I should be wary of as I can't work out why client is being charged so much just for the BK and vat submission when everything seems very basic so I almost feel like I'm missing something

Thanks in advance

KM

'charged fairly heftily'

What is the hefty charge? What qualifications does Accountant have? (out of interest).

KMBookkeeping · Member

£1500 pa just for basic quarterly VAT submission on apx 30 transactions a month , client is sending them a detailed breakdown and receipts so bookkeeping entries would not take much time .

Turnover 100k apx

Additional charge for directors payroll and accounts prep and stat filings at end of year . Don't know how extra much is being charged for this or qualifications of accountant . Client only currently wants to outsource the vat submission ( which is fine as my current licence doesnt cover ltd company account filing )

AC · Veteran Member

Fee not unreasonable given complexities/recent and impending changes and assumed knowledge base re Accountant (#) You will need to know who so you can send your prof enq letter so will find out.

If price pointing now, he will do it to you. (Race to bottom)

'Detailed breakdown'. Of what? Is that MTD compliant? 30 transactions per month PLUS receipts? Have you seen? What state? Clients lie and say they do not have much/it is easy/it is organised.

IR35. Partial exemption. Can you fully defend in event of enquiry?

(#) Good link on aweb, esp 2 points made today by 'practice for sale' and 'paddy55' https://www.accountingweb.co.uk/any-answers/potential-client-shocked-at-proposed-fee

Practice for sale

A chap had a erally annoying 'clonk' every few minutes in his plumbing. A series of plumbers 'bled' the system charging £45+vat each time. Each time within a day the noise was back.

A new plumber in town (but a very old chap) offered to come and sort it out. He spent 5 minutes gently tapping various parts of the system, then with a large soft headed hammer hit the bottom of the water tank quite hard. Noises stopped immediately.

"That'll be £150+vat please"

"What!!! for 5 minutes work??? How can you justify that???!!!"

"That's £30 for the call out and the 5 minutes tapping and hitting, and £120 for the 40 years experience which meant I know where to tap and hit"

Moral of the story? Don't underprice for anyone ever. Charge the right price to do the job properly.

(PS, I dont always follow my own advice, but that doesnt mean its not good advice LOL)

Paddy 55

I have noticed lately that small businesses are doing their best to be quoted a low fee. I suspect that one of the reasons behind this is that they realise that the smaller the fee, the less work the accountant can afford to spend on the job. He is likely to skimp on verifying the facts, accept without question all the information that the client provides. The accountant is likely to gravitate to a a "file-only" tax return. Thus the client will kill two birds with one stone i.e. lower fee and no questions asked.I

BudgetB · Guru

KMBookkeeping wrote:
£1500 pa just for basic quarterly VAT submission on apx 30 transactions a month , client is sending them a detailed breakdown and receipts so bookkeeping entries would not take much time .
Turnover 100k apx

Additional charge for directors payroll and accounts prep and stat filings at end of year . Don't know how extra much is being charged for this or qualifications of accountant . Client only currently wants to outsource the vat submission ( which is fine as my current licence doesnt cover ltd company account filing )

From things I've seen elsewhere, £350/£375 seems to be a quite common charge for a chartered doing even a basic VAT return. Hopefully the clients bookkeeping will be as easy and straightforward as they have made it sound. No idea how you price of course but don't charge him less than half of that amount - he'll have reduced his fee by half so he's happy and you may well be earning more than you would do normally so you're happy!

In terms of doing VAT for IFAs I wouldn't say that there were any specific issues to look out for over any other professional services type person. If you are only doing the VAT then I would say that his IR35 status (as picked up on by AC) wouldn't be your responsibility.

KMBookkeeping · Member

Thanks both

My main worry was there was something I was missing about ie IR35 status

Budget B - yes thank you , wise pricing advice . I'm not VAT registered so he will lose out on a reclaim there but my standard fee should still save him £500 a year with that in mind so worth the consult call for both us hopefully

Much appreciated

Maat · Veteran Member

I would not do it for that price. Agree with AC race to bottom. It has started. Also agree with AC - Exemption is in point. You dont answer the MTD issue.

KMBookkeeping · Member

Thanks

Client currently sends a spreadsheet of recorded expense totals and scans of each receipt over to accountant quarterly

My software is MTD compliant

As a bookkeeper rather than an accountant then if I'm charging at my standard rate ( which I would be ) then is there something I should be wary of in the above situation

He would still be paying and receiving advice from accountant regarding IR35 so wouldn't my liability be limited as I am merely charging for basic bookkeeping and VAT submission .

As this is my standard rate ( and I would imagine a fairly mid level rate for most bookkeepers who aren't accountants ) then I'm loathe to turn it down without good reason as if I'm charging my usual rate I don't feel like I'm partaking in a race to the bottom as they are the standard rates I can charge given my non accountant status

-- Edited by KMBookkeeping on Thursday 14th of January 2021 04:37:06 PM

Maat · Veteran Member

It is not your software that you should be concerned about in terms of MTD compliance, but how the data gets into your software. Looks at the rules for digital links.Perhaps have a re-read of comments.

KMBookkeeping · Member

Thank you - I'll dive deeper then

Leger · Master Book-keeper

Go for it KM, even at half the price it's worth doing. Bookkeeping fee at around £25 an hour plus add on charge for VAT return and it's easily covered. If you can get more good, but all this race to the bottom stuff is sphericals in my opinion. Yes, you can be too cheap I agree and I have been at times, but £25 an hour is (again in my opinion) not to be sniffed at, especially in the current situation.

MAAT, I don't see why there would be an issue with MTD. Can be imported and the receipts checked or simply key the receipts in from scratch.

Maat · Veteran Member

Leger wrote:

MAAT, I don't see why there would be an issue with MTD. Can be imported and the receipts checked or simply key the receipts in from scratch.

Of course. But OP suggested her software was compliant so that covered it. It does not, as I said above. So making OP more aware of the wider picture, her responsibilities and need for wider reading is surely being helpful. Encouraged to research rather than spoon feed.

KMBookkeeping · Member

Thanks both

That shines some light .

I was assuming that it was taken as read that I'd be manually checking and inputting the receipts which was an error on my part but it was good to refresh on the digital link rules

Have a nice day

Maat · Veteran Member

There could be an argument that says he is doing his own bookkeeping at least in part. Whether its correct or not is another issue, probably highly doubtful, especially with the VAT issue on the income side knock on effect.

Leger · Master Book-keeper

Maat wrote:
Leger wrote:

MAAT, I don't see why there would be an issue with MTD. Can be imported and the receipts checked or simply key the receipts in from scratch.
Of course. But OP suggested her software was compliant so that covered it. It does not, as I said above. So making OP more aware of the wider picture, her responsibilities and need for wider reading is surely being helpful. Encouraged to research rather than spoon feed.

Ok, my apologies, it seemed pretty straight forward to me.