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Poor service by accountant?

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    Poor service by accountant?

    Just wondering if I could do any better with accountancy. My current accountant does seem to be particularly proactive, apart from my VAT submissions and free agent reviews. For example, I've realized myself that I'm better off coming off the flat rate VAT scheme which I've been on for a year now.

    This only came about during a VAT review when I was told I couldn't reclaim any VAT elements on purchases at all. I then queried why and was told I was on the flat rate scheme. I've been with my accountant of over a year and surely they could see this was a very poor choice based on my activity. I've no idea how much VAT I've missed on on from all my expenses, unbelievable.

    #2
    Not that much, actually, or at least not as much as you might think. Easy enough to work it out for the year anyway. The FRS rate is a balance between input and output tax. It's only since the fairly recent rate change that it stopped making you money, but the net result is supposed to be only that the business doesn't lose out

    After all VAT is not your money, it's the taxman's.

    Also accountants are there to stop you making mistakes, not necessarily advising on corporate policy. That bit is down to you as the director...
    Blog? What blog...?

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      #3
      You still submit and claim company expenses when on flat rate - so there's nothing about it to inherently understand that you've done something wrong.
      ⭐️ Gold Star Contractor

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        #4
        Originally posted by PerfectStorm View Post
        You still submit and claim company expenses when on flat rate - so there's nothing about it to inherently understand that you've done something wrong.
        This ^^^^^^^

        It's unlikely you'll lose much due to being on FRS incorrectly. Unless you are buying large amounts of equipment for resale, and if you are then perhaps you're on the wrong FRS rate in any case.
        If you have a lot of hotels/meals on your expenses then that is likely to make the situation worse. Given the CV-19 scenario right now though I doubt that is the case.

        In general, being a contractor, on FRS after the first year of trading is not the best, although it does save the accountant some minimal effort.

        But..... this is not new news, and as a director you should understand every decision you've made, and being on FRS at all is a decision you've made.
        See You Next Tuesday

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          #5
          What about having to poke them to file VAT and Payroll submissions just before deadline?
          I get that people are overwhelmed with Coronavirus, but I'm not too thrilled at having to keep this on my mind and prod them about it.

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            #6
            Originally posted by malvolio View Post
            Not that much, actually, or at least not as much as you might think. Easy enough to work it out for the year anyway. The FRS rate is a balance between input and output tax. It's only since the fairly recent rate change that it stopped making you money, but the net result is supposed to be only that the business doesn't lose out

            After all VAT is not your money, it's the taxman's.

            Also accountants are there to stop you making mistakes, not necessarily advising on corporate policy. That bit is down to you as the director...
            The big argument against that is that it costs your company to administer it. Whereas now you're making £1 in £500, you used to make about £13. It should be at least a fiver or don't bother and let them miss out.
            The greatest trick the devil ever pulled was convincing the world that he didn't exist

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              #7
              It's better for me not to be on the flat rate if you only take the cost of my accountant into account, not to mention everything else.

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