Frequently asked questions
• I have been with my accountant since I started, how difficult is it to change to you?
• I have heard stories of accountants quoting a fee for doing a job and then it costing much more. How are you different?
• If I'm a client, how much do you charge if I ring you during the year?
• I own a property that I rent out. I am concerned that I might need to pay tax on my rental income, is it 20% on the total amount?
• I have put a new bathroom / kitchen in a property I rent out, can I offset this amount against the income for tax purposes?
• I have just lost my job and I am thinking about setting up on my own. What advice can you give?
Q: I have been with my accountant since I started, how difficult is it to change to you?
A: Changing accountant is much easier than changing your electricity or gas supplier.
There are two steps.
1) You send written authority by letter or email, to allow us to speak to your existing accountant to obtain your accounting and tax data. Once this is received:
2) We will then contact your previous adviser and request professional clearance. This is a professional courtesy letter that does not usually raise any problems, but is necessary to comply with the associations rules.
Q: I have heard stories of accountants quoting a fee for doing a job and then it costing much more. How are you different?
A: Normally when accountants give a quote for a job this is based on the amount of hours they believe it will take to complete the work. If they spend more hours on your accounts then this is normally reflected in the fee.
From our past experience clients prefer to know how much it is going to cost from the start with no surprises. This is why we offer a competitive fixed fee service.
Q: If I'm a client, how much do you charge if I ring you during the year?
A: We actively encourage you to contact us during the year with any problems that you have. It only costs the price of a phone call. If additional work is required then supplementary engagement terms will be sent out, showing the cost. You will be made aware of all costs before work is undertaken. No hidden surprises.
Q: I own a property that I rent out. I am concerned that I might need to pay tax on my rental income, is it 20% on the total amount?
A: No. In fact the large majority of people pay very little tax, if any on properties they let out. This is because you can offset the mortgage interest, management fees, insurance, maintenance, ground rents etc. against the income. Some people can also claim 10% of the income as a wear and tear allowance. Why not contact us to arrange a meeting to discuss your needs. You can also carry forward a loss from the previous year if applicable. (tax returns £200 + VAT and discounted second returns for couples).
Note: The revenue are searching for 'ghost landlords', these are landlords that have failed to recognise property on their tax returns. They are using information gained by banks, tenants and letting adverts.
Q: I have put a new bathroom / kitchen in a property I rent out, can I offset this amount against the income for tax purposes?
A: Depends. This is a 'grey area'. Each case depends on whether it is an improvement cost or a replacement cost. If the property is now worth more due to the 'improvement' then it will be used to calculate capital gains tax when you come to sell. If it is a replacement to reduce further maintenance bills and not increase the property value by the amount spent then this would normally be allowed to be offset during the year, Please contact us for a definitive answer as the above is only a brief explanation.
Q: I have just lost my job and I am thinking about setting up on my own, what advice can you give?
A: It is generally a very difficult time to find a new job, setting up on your own is not an easy option though. Not only do you need all the necessary skills of your trade, but you will now be responsible for:
• Purchasing the tools of your trade
• Networking / Advertising to find clients
• Working out prices for the work
• Possibly having to write contracts for the work you are going to undertake
• Being 100% responsible for your work
• Collecting amounts that are owed to you
It is not the easy option working for yourself, but it does bring the benefits of being your own boss.
If you are considering or have just started out, why not contact us for a free initial consultation at your home where we can discuss your business needs.