Accountant fees

I am jointly assessed with my husband. His earnings are entirely PAYE. I have some PAYE and recently some non-PAYE. I earn in total about 5000euro a year. We are both employees, have no assets/inheritances etc. I had an accountant prepare my tax return recently as I had 2 items from 2003 and 2004 that I had not managed to claim tax relief for and I needed to regiser for self- assessment.

I have used this accountant in the past and was happy with the service and fees so, unfortunately I handed over the documents without getting a quote first. When I was signing off the return, I saw that the fee was 165% more than the fee for 2 years ago. I was not satisfied with the service as there were a couple of errors which I will have to contact the revenue commissioners about to make sure they have been corrected.

Hence, I wrote to the accountant outlining my problems and asking for a breakdown of the fee. He has replied demanding that I withdraw my comments or he will take action to protect the reputation of his firm against defamation!

I would like to know how accountants fees are calculated. Is this a reasonable rate of inflation? If he continues in this agressive manner, what are my options?

Its impossible to tell whether or not you are getting good value on the basis of the information you provide.

It is meaningless to compare your fee this year to your fee 2 years ago if the work involved in both scenarios is different.

You say that the second fee includes work covering 2 tax years, unless this was also the case first time around there will obviously be additional work & cost this time around. In addition, registration for self-assessment will invariably mean that your tax affairs are more complicated than previously.

In general, the ever increasing burden of regulation of accountants (eg the recent 'Anti Money Laundering' regulations and the forthcoming 'Financing of Terrorism' regulations) tend to push up accountancy fees due to the volume of additional work necessitated. Every accountant is obliged to operate full client ID verification and other anti-money laundering procedures on each & every client, even, bizarrely, straightforward PAYE tax return cases.

It is also impossible to judge the "defamation" issue without seeing the exact text of your letter to him. He is entitled to protect his good name if you did defame him - please note that I'm not saying that you did - but if you are satisfied that your comments were correct and are capable of being substantiated, you should not worry unduly about this particular issue.

I can't see how the defamation issue arises in the first place if you simply pointed out errors to the accountant himself ie you weren't discussing his alleged incompetence with others. Have a look at this article [broken link removed]

There was much less to be done this time. Last time we had to tidy up over several years. This time it was just to claim for tax relief on specific professional expenses for 2003 and 2004 and to prepare a preliminary tax return for 2005.
He has stated in his reply that his fees have increased by 65% per annum. How can that be justified?
I am not worried about the threat of legal action. That's just bluster. I am surprised at the agressive response to what was a perfectly legitimate request for a breakdown of his fees in the face of a less than satisfactory service. This has not been addressed in his reply.
Do accountants charge on a per hour basis? If so, are they obliged to keep a record of those hours?

Kat said:

Do accountants charge on a per hour basis? If so, are they obliged to keep a record of those hours?

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Depends on the Job. Your accountant might have €150 on his timekeeping system but might charge a flat fee of €250 per return and €150 per registration.

If you're sure your Return is incorrect then get your accountant to get it amended.