How to find a good accountant? Five top tips from a tax expert

Heather Rogers, founder and owner of Aston Accountancy, is our tax reviewer. Find out how to ask her a tax question in the box below.

Today, she answers the questions people most want to know about hiring an accountant: when you need one, how do you find a decent one, and how much does it cost?

Most people use a lawyer at least once in their life, but not everyone needs an accountant.

However, having the right firm in your corner when you really need help with your finances can save you a lot of stress and ensure you don’t get stuck paying the wrong amounts of tax.

A good accountant will not hesitate to fight HMRC on your behalf if your tax bill is incorrect.

If you’re struggling to complete your tax return, getting pointless letters from HMRC or worried you’re paying too much, it might be time to find one.

1. When is the best time to hire an accountant?

The most common scenarios are listed below, but sleepless nights over an unfinished tax bill or return is a sign that you may need to get a professional on your side.

Personal

– You seem to be paying a lot of tax through PAYE and your tax code is getting worse every year, but you have no idea what this means or why

– You are a higher rate PAYE taxpayer but have other income from investments or a pension

– You are making pension contributions to a private or occupational pension and are not sure if you are getting the right tax benefits, especially if you are a higher rate taxpayer.

– You have been doing your own tax returns for years but now HMRC have launched a tax investigation into your affairs

– You need tax advice regarding a personal financial decision you are about to make

– You have no idea about inheritance tax or trusts and need help – you can also contact an estate planning attorney or financial advisor here

– You have a personal windfall and you don’t know how to declare it

– You receive a large severance payment and must include it in your tax return

Property

– You have recently sold property other than your home and need to pay capital gains tax and make a return to HMRC

– You are a private landlord with rental income

Business

– You are starting a business or buying a business

— Your business deals with export and import

– Your company is growing very fast, or you are in financial difficulties

– You already run a business and keep your own books either manually or electronically, but now you need to register as a VAT payer and deal with the dreaded Digital tax transfer mode

– You are thinking of hiring someone

– You are a sole trader but are considering becoming a limited liability company or limited liability company

– You have a business that needs to be sold or you are getting out of it

– You need tax advice on a business decision you are planning to make

2. Where do you start your search for a good accountant?

Qualification

Look for someone who is chartered or certified so you know you’re dealing with a qualified accountant.

This also means they will be regulated by the association and will need to have professional indemnity insurance.

Examples of larger associations are Institute of Chartered Accountants, Association of Certified Public Accountants and Chartered Institute of Taxation.

Chartered or certified accountants must maintain their standards by undertaking a certain amount of ‘continuing professional development’ (CPD) each year.

They may also have good working relationships with other professionals such as solicitors, financial planners, investment advisers and insolvency practitioners, meaning they can refer you to the right person if needed.

Examination

Look for a proven firm, study the services offered and make sure they solve your problem.

As explained above, most general practitioners will deal with most of the scenarios described above.

However, if your circumstances are more complex, such as tax planning, inheritance and trust tax, HMRC tax investigations into your affairs of a complex or serious nature, the sale or purchase of a business or international matters, you need someone who specializes in that area.

Word of mouth

Ask your friends, family and colleagues if they have an accountant. A recommendation from someone you know and trust is always best, but also do your own research.

3. How to choose the right accountant?

Call or meet

Call them to discuss your needs. It’s also a good idea to make an appointment in person so you can meet them and decide if they’re a good fit for you (and vice versa).

They may ask you to bring ID to the first appointment.

Under the Money Laundering Regulations, accountants are required to request proof of identity (among other things) both in the form of photographs (passport/driving license) and proof of address (mortgage statement/utility bill).

They cannot act otherwise for you. We are all used to this with banks and lawyers; accountants are no different. Don’t use them if the question has never been raised.

Creating what you want

Some accountants offer a free initial consultation and some don’t. You won’t get a lot of free advice, so don’t expect it.

The first meeting is for the accountant to understand your requirements; at this stage they have not engaged you as a customer.

However, you have the opportunity to ask them any questions you may have, such as their experience with your issue, timelines, and costs.

Bring information regarding your problem that will help them help you.

Find out the cost

Cheap is not good, value for money. Remember that if they give you a fixed price, it may change if the problem changes or develops.

The timing of the required work is important. You don’t want to bring in your books and records only to have them sit for six months and then get a call two days before your tax is due.

Another admin

If you proceed, you will receive a commitment letter outlining the services provided, limitations and responsibilities of both parties.

It should also include terms of business and other documents depending on what they are for. It should also include costs/hourly rates and payment terms.

You will also need to sign a 64-8 which authorizes the accountant to act on your behalf with HMRC.

Top questions: If you need an accountant, how do you find a decent one and how much does it cost?

4. What should you expect to pay?

The price depends on the service you are looking for and the complexity of the case.

For a basic tax return with some employment income, simple investment income and a pension, you can expect to pay around £200-£300 plus VAT.

It should cost around £500-£600 plus VAT to dispose of the property and calculate the capital gains and submit the form.

Basic sole trader accounts cost from £450 depending on your business turnover, transactions, how well your accounts are kept and where you are in the country.

Large London firms will charge significantly more than smaller high street firms.

Limited company accounts will depend on your company structure and the size of your business. Limited liability company accounts are often more expensive than sole proprietorship accounts.

If you need an audit, your accountancy fees will be several thousand pounds a year.

If you have a complex tax investigation or need advice on tax or financial planning, then you can expect to pay £150 an hour.

Other services will be case-by-case and depending on who in the firm is doing your work.

Feel free to get multiple offers, but a very low fee can mean the service is pretty basic.

5. What are your options if things go wrong?

Talk to your accountant first and try to resolve the issues if you are not satisfied with the services you have received.

If you cannot resolve this directly with the firm, you can complain to their trade association if they have failed in their professional duty.

Associations usually don’t get involved in fee disputes, so if this is the case, you’ll have to file a civil lawsuit.