# Accountant overcharging?



## buckrodgers (6 Mar 2007)

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.


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## Joe1234 (7 Mar 2007)

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?


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## extopia (7 Mar 2007)

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.


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## buckrodgers (7 Mar 2007)

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.


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## MOB (7 Mar 2007)

"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.


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## Joe1234 (7 Mar 2007)

extopia said:


> Well it doesn't sound exorbitant, but perhaps money is tight as the business winds up?




Maybe money is tight as the business is winding up, but that should not be a reason for an accountant to reduce their fees.


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## buckrodgers (7 Mar 2007)

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.


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## Brendan Burgess (7 Mar 2007)

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


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## MOB (7 Mar 2007)

"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.


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## jem (8 Mar 2007)

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


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## extopia (8 Mar 2007)

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



Hydoroelectric power company perhaps?


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## ubiquitous (8 Mar 2007)

Brendan said:


> Ask your accountant about the voluntary wind up option.


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:
> 
> ...





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.


Does your own business often waive its charges to dissatisfied customers?


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## ubiquitous (8 Mar 2007)

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



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.


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## ubiquitous (8 Mar 2007)

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.



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.


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## buckrodgers (9 Mar 2007)

Thank you to everyone for their advice. I have deceided to get a loan and pay for the company to be wound up asap.


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## extopia (9 Mar 2007)

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?


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## z107 (9 Mar 2007)

Do you use a computerised accounts system? - or are your books all over the place?


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## oopsbuddy (9 Mar 2007)

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.


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## buckrodgers (9 Mar 2007)

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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## extopia (11 Mar 2007)

buckrodgers said:


> I didnt ask them how much the accounts would cost to do  normally.



What did they charge you last year, or is this your first year in business?


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## buckrodgers (12 Mar 2007)

This would be my third set of accounts. The first too had to be audited as I missed the return date in Year one. They charged me 3500 the first year and 3200 the second year including vat.


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## simplyjoe (12 Mar 2007)

I am an accountant. To wind up a company without having to do accounts we would charge €600 plus the fees (advertisement €190 odd +, CRO fees). To do any set of accounts we would charge a minimum of €600. The fees charged by the accountant does not seem to be hugely off the mark. Dont even think about doing it yourself, if as you say you are not good at paperwork. 
The €3,000 PA charge also appears to be reasonable. To do any audit there is roughly €1,800 worth of work. Much of this work is easy but it has to be done according to government and institute rules. The client gets no value from this and mostly involves filling in reams of useless reports. Dont blame me blame the government. The effect of this is that if you are one day late with your Annual Return this will cost you €103 fine and €3,600 extra audit fees. A ridiculous penalty.
Why were you late? Did the accountant get the paperwork on time? Was there missing information? Did you heed the CRO and the accountants warnings.
Should you have formed a limited company? Probably not. Some (not necessarily your own advisors) accountants are naughty when it comes to advice in respect of this. I would estimated that you would need a profit of about €80,000 plus before a company should be considered. Each case, however is different.


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## buckrodgers (12 Mar 2007)

Thank you again for your replies. I was late the first year as my mother in law died very suddenly, she was only 55 so as you can imagine it was a big shock. The business fell by the wayside at the time I am afraid. I didnt realise it would cost so much to be late, at the time I was in such a daze I didnt even realise I was late. I dont remember receiving anything from the cro regarding an annual return date but then again I was all over the place at the time so I can only blame myself.


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## z107 (12 Mar 2007)

> Dont blame me blame the government. The effect of this is that if you are one day late with your Annual Return this will cost you €103 fine and €3,600 extra audit fees. A ridiculous penalty.



Who sets the extra audit fees? - is it Government controlled?


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## simplyjoe (12 Mar 2007)

umop3p!sdn said:


> Who sets the extra audit fees? - is it Government controlled?


 
The audit fee relates to the extra work needed to do an audit. This would entail sensible things like checking sales, validity of purchase invoices, bank transactions, bank balances, existence of assets, etc.. The majority of the work however is purely procedural and an absolute waste of time. The work in recent years has been standardised and involves the filling in of various schedules, reports, etc.  Very time consuming. The audit fee depends upon the amount of time undertaken multiplied by the charge out rate of the accountant involved. The figure I gave was an estimate for a very small business/company. The quality of the work undertaken is supervised by each accountancy body with regular inspections undertaken. If you do not do the work you are disciplined by your institute. Each institute is also supervised by an independant government body which is funded by the accountancy professions. This independant body is made up of mostly non accountants.


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## simplyjoe (12 Mar 2007)

buckrodgers said:


> Thank you again for your replies. I was late the first year as my mother in law died very suddenly, she was only 55 so as you can imagine it was a big shock. The business fell by the wayside at the time I am afraid. I didnt realise it would cost so much to be late, at the time I was in such a daze I didnt even realise I was late. I dont remember receiving anything from the cro regarding an annual return date but then again I was all over the place at the time so I can only blame myself.


 
I feel for you but unfortunately CRO dont care. You get caught drinking and driving and you get a fine of €1,000. Due to extenuating circumstances you are late filing your company accounts and you effectively get fined €3,700 + with no excuses allowed. Its just not justice.


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## z107 (12 Mar 2007)

Thanks for clarifing that simplyjoe



> Due to extenuating circumstances you are late filing your company accounts and you effectively get fined €3,700



So you are not actually fined this, you are charged this by your accountant. The only fine involved is the €103?



> The work in recent years has been standardised and involves the filling in of various schedules, reports, etc. Very time consuming.


You'd think some enterprising company would write some software to handle all this standardised, time consuming work.


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## simplyjoe (12 Mar 2007)

umop3p!sdn said:


> Thanks for clarifing that simplyjoe
> 
> 
> 
> So you are not actually fined this, you are charged this by your accountant. The only fine involved is the €103? You'd think some enterprising company would write some software to handle all this standardised, time consuming work.


 
The fine is €100 plus €3 per day up to a max of €1,200. You also lose your audit exemption for that year and the following year - effectivelly a further fine when you have to pay the auditor.

There is software but it has to be applied to each case. Over reliance on the software is dangerous.


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## buckrodgers (12 Mar 2007)

Maybe someone else will read this and learn from my mistakes, or you never know - I might win my money back at cheltenham - I won a betting voucher today - I was going to try my luck!


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## simplyjoe (13 Mar 2007)

Good luck


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