Accountant's Monthly Fee for Limited Company

Whyner

Hiya,

I have just set up a limited company and was wondering what actions I need to take. Is there anything that is required on a monthly basis or is it just your tax returns at the end of the year.

I got an accountancy firm to set up my limited company and they now charge me a fee €150 a month. My consultancy company are going to be making cheques out to me on a monthly basis, i.e when I invoice them so where does my accountant play a part? All a bit over my head to be honest but would like to get a better understanding of this process and ideally cut out the accountancy fee.

Also, is there any advice on what expenses can be claimed. I'm a IT contractor working in town. Sorry, there's probably threads on this already or I'm in the wrong place.

Thanks...

JackieChan

Whyner,
Since your paying a solictor 150/month to look after your company they should be the ones giving the answers.
The first question I would ask is what are you getting for the 150/month?
Does this include the cost of audited accounts for year end ? Or is it only for dealing with income tax/prsi and vat payments?

If the later I would make the payments myself(very straightforward) and save the 150 a month and then you just have the cost of getting audited accounts at year end(between 900-1100 ballpark)....

The simple way to do things is
1) Invoice for work done(daily rate+vat@21%), providing your company bank details
2) On receipt of money,deduct reasonable expenses and calculate paye/prsi. Lodge rest to your personal bank account.
And pay the tax/prsi(can be done by standing order if amounts dont fluctuate too much over the year) to collector general monthly
2b)Deduct allowable vat expenses(computers/call credit/etc..) and pay the rest of vat every 2 month
3b)year end get accountant to do year end accounts.Make sure you keep all receipts/invoices.
Since accountants may advise of extra tax saving measures, its useful to leave some extra money in company account so that you can use this to pay you this if the need arises.Vice versa if you've made some mistakes!

I'd imagine that in your current situation that you would provide tax cert to solictor and then provide with invoices/receipts monthly and they would calculate prsi/tax/vat and either make payments or advise what you need to pay. They would then advise what you should take for yourself.
I myself took the easy option and used an umbrella company,no worries about forming/disolving/calculating and paying paye/prsi and vat or paying extra for year end accounts.
This allows me to be a proprietary director. So that I'm classed as PAYE employer and receive pay slips. Made it straight forward to get my mortgage last year!

Tax deducable:
These are only the ones that quickly come to mind. Your accountant should be able to provide a comprensive list and any conditions about them.
Monthy/yearly bus/rail tickets
Mobile phone credit
Postage
Work related travel(except to and from normal place of work)

dooloo

I would imagine this €150 per month is in lieu of the annual fee. Most accountants do this for cashflow reasons.

€1,800 for the year is not bad if it includes the following:-

Preparation and audit of accounts
Company secretarial services, i.e. Form B1 and writing up of minutes
Corporation tax return for company
Income tax return for director
Advice regarding preliminary tax for both company and director
General taxation advice

I imagine that you are preparing your own VAT returns and PAYE/PRSI returns. Otherwise you are getting an excellent deal

Whyner

This is what they do:

Under this option we will incorporate a limited company with a name of your choice or you can pick one from our list of ready-formed companies. You will own the company and will be one of the registered directors. You are legally responsible for the company but we will do most of the work for you.
As part of our set-up service we deal with the following:

- Incorporation of Company
- Appointment of Directors & Company Secretary
- Register for VAT/PAYE/Tax
- Application for self-employed certificate (if required)
- Assist with bank account opening

To assist you in your role as owner/director we provide a full accounting and administration service for a fixed monthly fee, to include the following:

- Monthly/Weekly invoicing
- Processing of monthly salary payments
- Prepare and submit monthly PAYE returns
- Prepare and submit bi-monthly VAT returns
- Processing expense claims
- Preparation of Annual Accounts
- Preparation of employer's annual P35 form
- Preparation and submission of Corporation Tax Return

I've got everything set up now and will be invoicing my consultancy co tomorrow and then lodging my first cheque into my business account.

Some companies charge a % but if you are on a decent rate then they're ripping you off. i.e the same work but a higher charge.

Now I've got to work on expenses.

What type of expenses do you charge? Any unusual ones??

shantor

Whyner wrote: »

This is what they do:

Under this option we will incorporate a limited company with a name of your choice or you can pick one from our list of ready-formed companies. You will own the company and will be one of the registered directors. You are legally responsible for the company but we will do most of the work for you.
As part of our set-up service we deal with the following:

- Incorporation of Company
- Appointment of Directors & Company Secretary
- Register for VAT/PAYE/Tax
- Application for self-employed certificate (if required)
- Assist with bank account opening

To assist you in your role as owner/director we provide a full accounting and administration service for a fixed monthly fee, to include the following:

- Monthly/Weekly invoicing
- Processing of monthly salary payments
- Prepare and submit monthly PAYE returns
- Prepare and submit bi-monthly VAT returns
- Processing expense claims
- Preparation of Annual Accounts
- Preparation of employer's annual P35 form
- Preparation and submission of Corporation Tax Return

I've got everything set up now and will be invoicing my consultancy co tomorrow and then lodging my first cheque into my business account.

Some companies charge a % but if you are on a decent rate then they're ripping you off. i.e the same work but a higher charge.

Now I've got to work on expenses.

What type of expenses do you charge? Any unusual ones??

sounds like a good deal

look out for the annual ARD.. this needs a full P&L and Balance SHeet for companies trading more than 6(?) months... ideally your accountant would do that

mountainyman

Do they sign off on your accounts.
Do they submit everything to the ODCE?

MM

RoryW

shantor wrote: »

sounds like a good deal

look out for the annual ARD.. this needs a full P&L and Balance SHeet for companies trading more than 6(?) months... ideally your accountant would do that

mountainyman wrote: »

Do they sign off on your accounts.
Do they submit everything to the ODCE?

MM

A few comments based on an example

Example
Company set up 1 Jan 08
First Annual Return Date is automatically 1 Jul 08
Must file Form B1 (download from Companies office) by 28 July 08
If late fine of 100 euros plus 3 euro per day until filed.

Accounts prepared 1 Jan - 31 Dec 08 (first year)

These do not need to be audited assuming you elect during the financial year to avail of the audit exemption (most likely to apply unless your turnover is more than 7,350,000 !) Elect for audit exempion as accountant will charge you less.

File Form B1 and Form B73 to extend the ARD from 1 July 09 to 30 Sept 09. This is the latest date possible as accounts (which are required for every return other than the first one) cannot be more than 9 months old. File in CRO by 28 Oct 09. If filed late you have the late filing fee etc and more importantly you cannot avail of the audit exemption for both the year you are late (2008 in the example) and the following year (2009 in the example). THis will increase your costs so DO NOT miss the deadline.

Nothing is filed with the ODCE. It is filed with the CRO.

Suggest that you keep company accounts year the same as the tax year which is the calender year as this makes things easy to follow.

Other deadlines to watch (using my example above)

1. PAYE
Pay by 14th of following month. If you know how much ou will pay yourself pay by monthly DD and then you do not have to fill in a form P30 each month. Only annual return (P35) with the balance, if any, payable

2. VAT

Due every 2 months and could also elect to pay by DD with an annual return at the end of the year

3. Income Tax
As a director you MUST file a tax return by 31 Oct each year showing all your income and claiming what allowances are due even if all your income is taxed under the PAYE system. If you dont you could be hit with penalties and interest by revenue

4. Corporation Tax
Pay first payment (which might be NIL) by 21 Nov 08 (assuming 31 Dec 08 year end in my example)
and file and pay the balance by 21 Sept 09

Above just some thoughts and perhaps Mr "€150 a month Accountant" has already explained this all to you. You get what you pay for and sometimes you dont !

Disclaimer : Above is a general comment and you should seek professional advice before acting or refraining from acting on anything above !!!!

Finally, good luck with your venture

Whyner

Thanks for the extra info. I have a meeting with him shortly so I'll try to cover all the scenarios you've raised.

They are a reputable firm in Dublin which specialise in IT Contracting but I understand where you're coming from.

Nice Wan...