How do you find a good accountant? Five tips from a tax expert on when to seek help, hiring the right firm and typical costs

By HEATHER ROGERS FOR THIS IS MONEY

Updated:

Heather Rogers: Find out how to ask her a tax question in the box below

Heather Rogers: Find out how to ask her a tax question in the box below

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

She answers the questions people most want to know about hiring an accountant: When do you need one, how do you find someone decent, and what does it cost?

Most people use a solicitor at least once in their lifetime, but not everyone will need an accountant.

However, if you have the right firm in your corner when you really do need help with your finances, it can save a lot of stress and ensure you don't get stuck paying incorrect amounts of tax.

A good accountant will not hesitate to go into battle against HMRC on your behalf when your tax bill is not right.

If you are struggling to fill in your tax return, receiving letters from HMRC that make no sense, or worrying that you are paying too much, it might be time to find one.

 1. When is it a good idea to hire an accountant?

The most common scenarios are below, but having sleepless nights over a pending tax bill or return is a sign you might need to get a professional on your side.

Personal

- You seem to be paying a lot of tax through PAYE and your tax code seems to get worse every year but you have no idea what it all means and why

- You are a higher rate taxpayer on PAYE but you have other income from investments or a pension

- You are making pension contributions into a private or work pension and aren’t sure if you are getting the right tax relief, especially if you are a higher rate taxpayer.

- You have been doing your own tax returns for years but now HMRC has opened a tax enquiry into your affairs

- You need tax advice on a personal financial decision you are thinking of taking

- You have no idea regarding inheritance tax or trusts and you need some help - you can use an estate planning solicitor or financial adviser here too

- You have a personal windfall and are unsure how to declare it

- You receive a large redundancy payout and need to include it on a tax return

Property

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

- You are a private landlord with rental income

Business

- You are starting up in business or buying a business

- Your business is involved in exporting and importing

- Your firm is growing very fast or you are getting into financial difficulties

- You are already in business and keep your own books either manually or electronically, but now you need to register for VAT and deal with the dreaded Making Tax Digital regime

- You are thinking of employing someone

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

- You have a business to sell or are retiring from one

- You need tax advice on a business decision you are thinking of taking

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

Qualifications

Look for someone who is chartered or certified, so you know that you are dealing with an accountant who is qualified.

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

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

Chartered or certified accountants have to maintain their standards by completing a certain amount of 'continuous 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 someone suitable if necessary.

Expertise

Look for an established firm, study the services offered and make sure that they cover your particular 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 tax and trusts, HMRC tax enquiries into your affairs of a complex or serious nature, selling or buying a business, or dealing with international matters, you need someone who specialises in that area.

Word of mouth

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

How can you tell if you have consulted the right kind of firm? 

Members of the Institute of Chartered Accountants and members of the Chartered Association of Certified Accountants will be designated by the initials after their name.

For chartered accountants, they will either have ACA after their name, or if they have been a member of the institute for 10 years or more, they will have the designate FCA.

For Chartered Certified Accountants, they will have ACCA after their name, and again, if they have been member of the association for 10 years or more, they will have the designate FCCA.

Members of either organisation should be able to handle the scenarios described above with ease.

You may, if you have a complex issue, such as a tax enquiry by HMRC, need to consult an expert in the field. The Chartered Institute of Taxation, where members use the designate CTA after their name, is a highly reputable organisation.

For less complex issues, such as VAT returns and bookkeeping, you may wish to use a good bookkeeper - but do your research first, make sure they have plenty of experience and get a recommendation. There is an Institute of Certified Bookkeepers too.

If you are in financial trouble, an insolvency practitioner can help you, and the Insolvency Practitioners Association can assist here.

For financial planning, including pensions and inheritance tax planning, you can use a financial planner, or a financial adviser. The Chartered Institute for Securities and Investment is a good place to start. 

3. How do you choose the right accountant?

Call or meet

Call them to discuss your needs. It is also a good idea to book a face to face appointment to enable you to meet them and decide if they are for you (and vice versa).

They may ask you to bring ID for the initial meeting.

Under the Money Laundering Regulations, accountants are required to ask for proof of identity (amongst other things) both by way of photographic evidence (passport/driving licence) and proof of address (mortgage statement/utility bill).

They cannot act for you otherwise. We are all used to this with banks and solicitors; accountants are no different. Do not use them if this matter is never raised.

Establishing what you want

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

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

You do, however, get the opportunity to ask them any questions you have, such as their experience with your issue, timescales and costs.

Take information with you regarding your issue that will help them to help you.

Find out the cost

Cheap is not good, value for money is. Remember if they quote you a fixed price, this can change if the issue changes or develops.

Timescales for the work you need done are important. You don’t want to have brought your books and records in only to have them sat on for six months and then get a call two days before the tax payment is due.

Other admin

If you proceed, you will have a letter of engagement identifying the services being provided, the limitations and the responsibilities of both parties.

This should also include terms of business and other documents, depending on why they are being appointed. It should also include costs/hourly rates and payment terms.

You will also need to sign a 64-8 which gives an accountant authority to act on your behalf with HMRC. 

Top questions: When do you need an accountant, how do you find someone decent, and what does it cost?

Top questions: When do you need an accountant, how do you find someone decent, and what does it cost?

4. What should you expect to pay?

The cost depends on the service you are seeking and the complexity of the matter in hand.

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.

For a property disposal and capital gains calculation and form submission, it should cost around £500-£600 plus VAT.

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

Big London firms will charge a lot more than a smaller high street firm.

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

If you need an audit, then your accountancy fees will run into several thousands of pounds per year.

If you have a complex tax enquiry, or require tax planning or financial planning advice, then you can expect to pay £150 an hour upwards.

Other services will be on a case by case basis and depend who in the firm is carrying out your work.

Feel free to get several quotes, but a very low fee may mean that the service is quite basic. 

5. What options do you have if things go wrong?

Talk to your accountant first and try to resolve matters if you are not happy about the service you have received.

If you can’t sort it out with the firm direct, you can complain to their professional association if they have failed in their professional duty.

Associations do not normally get involved in fee disputes, so if it is about that you would have to pursue a civil claim.

Ask Heather Rogers a tax question

Heather Rogers, founder and owner of Aston Accountancy, is our tax columnist. She is ready to answer your questions on any tax topic - tax codes, inheritance tax, income tax, capital gains tax, and much more.

If you would like to ask Heather a question about tax, email her at [email protected]. Please put TAX QUESTION in the subject line.

Heather will do her best to reply to your message in a forthcoming monthly column, but she won't be able to answer everyone or correspond privately with readers. Nothing in her replies constitutes regulated financial advice. Published questions are sometimes edited for brevity or other reasons.

Please include a daytime contact number with your message - this will be kept confidential and not used for marketing purposes.

If Heather is unable to answer your question, you can also contact MoneyHelper, a Government-backed organisation which gives free assistance on financial matters to the public. It can be found here and its number is 0800 011 3797.

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