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TAX RETURN, ANNUAL ACCOUNTS, CORPORATION TAX, VAT RETURN...

Updated: Aug 29, 2019

- topic always on time.


A couple of days ago, I received a phone call from one of my clients. He asked me to recommend a good accountant because he wants to change the accountancy office. I said that I know a very professional one and I can share their contact details with him.

About 10 minutes later he phoned me again screaming: "She is so expensive, I pay 100 pounds for the tax return in London, and she wants to charge me over 280 pounds for the same! Why, could you explain me that? "

I asked him- "Are you aware of what services are covered by the fee in each of these tax return providers?" … Obviously, he never asked?

My next question was: "What kind of documents did you provide to submit your previous returns?”

“Who will take responsibility for any mistakes or miscalculations on your self-assessment?”

It took him a few minutes to realise and understand the variances between pricing and quality of both accountancy offices.

Below, there is a comparison of two accountancy services providers:



Before my final thought, let me show another example.


Study case:

- Scottish company:

- Time of trading: 8 years;

- Number of employees: average 7;

- Annual turnover: around 120 000£- 160 000£

- Bookkeeper: External 200£/month

- Payroll: External 100£/month

- Annual Tax Return: External more than 1000£/year (based on very basic generic reports prepared by the bookkeeper)


Why have they paid 1000£ for an Annual Tax Return? They did this because the accountancy office is renowned, influential with a good brand. It's ok if you feel safer that way. Everything is good until...


HMRC start checking you.

What may happen next?

- HMRC investigation – over 13 months

- Fine – more than 6000£

- He was accused of fraud. In the last letter inspector talking about the possibility of imprisonment for a term of 5 years.

Fraud Act 2006

“A person who is guilty of fraud is liable—

(b)on conviction on indictment, to imprisonment for a term not exceeding ten years or to a fine (or to both).”

He came to us after it felt like a very long few months of HMRC investigation. I think I do not need to mention how this investigation ruined his personal life.

We checked all documents concerning eight years of activity, putting all the figures one by one on the correct accounts.

What had we discovered?

More than 70% of the figures were wrong! All documents from the bookkeeper were correct, but on the TAX Return were wrong! I can’t say a lot about this case, but on the covering letter of the report which actually was the base for an original tax return (the report was prepared by the accountancy office – Chartered Accountants) there were a few significant sentences, like:


You have approved the accounts for the period ended 5 April... and have acknowledged your responsibility for them, for the appropriateness of the financial reporting framework adopted add for providing all information and explanations necessary for their compilation.

We have not verified the accuracy or completeness of the accounting records or information and explanations you have given to us, and we do not, therefore, express any opinion on the accounts.


Seriously?!? Five pieces of a paper with a beautiful cover with meaningless numbers for £1000!

On completion of the case, the HMRC paid him back around £5000, cancelled the fine of £6000 and repealed the accused of fraud.


How to choose the good one?

The first thing is – Check what you are paying for? Where is the responsibility and what kind is it?

Secondly – Read what are you signing!

Thirdly – Do not trust your friends, 100 %. Are you sure that your friend checked the offices had proper credentials or just followed the brand like our client from the study case?

Fourth thing is – Do not look for the cheapest one, it is not worth your stress.


And remember You do not need to agree to all contract terms, you can always discuss and negotiate some of them.

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