Quick question re accountancy fees in yearly accounts.

muffler

I paid my accountant over €1900 in fees last year but in the 2010 accounts he has sent to me for signing he has included only €700 in respect of accountancy fees.

Is there any reason for this or is that the max. amount that can be claimed for tax purposes?

Fabo

there is no max. you put through what was paid plus what is owed at year end minus what was owed previous year end. so the 700 figure doesnt make sense. was there a cash payment that was missed ?

J.Ryan

The payment you made could include VAT, other things that could explain the difference are fee's owed from last year and/or opening and closing accruals/prepayments.

You could always ask him/her.

muffler

Fabo wrote: »

there is no max. you put through what was paid plus what is owed at year end minus what was owed previous year end. so the 700 figure doesnt make sense. was there a cash payment that was missed ?

Nothing owed from previous year and his fee for 2010 was paid in full last year.

He had 2 separate matters to deal with on my behalf. He was paid €1700 in cash for one bit of work and I got a receipt for this. He was later paid €242 by cheque and although no receipt was issued the cheque was a receipt in it's own right.

The figures just dont add up and before I go making a fool of myself by confronting him about it I was hoping there might have been some sort of rational explanation.

barneystinson

muffler wrote: »

I paid my accountant over €1900 in fees last year but in the 2010 accounts he has sent to me for signing he has included only €700 in respect of accountancy fees.

Is there any reason for this or is that the max. amount that can be claimed for tax purposes?

Is it a Ltd Co set of accounts?

If so, is it possible that the amount of fees is split between the fee for the company and the fee for your personal affairs?

Shurwhynot

Were the previous years accounts audited by any chance? He may have claimed the audit exemption for the 2010 accounts and therefore, spent less time preparing them

muffler

barneystinson wrote: »

Is it a Ltd Co set of accounts?

If so, is it possible that the amount of fees is split between the fee for the company and the fee for your personal affairs?

No Ltd co. Im self employed....see below

Shurwhynot wrote: »

Were the previous years accounts audited by any chance? He may have claimed the audit exemption for the 2010 accounts and therefore, spent less time preparing them

Yes, I was audited in March 2010 for the 06 and 07 years. The audit was to have been in Oct. 09 but due to illness it was postponed to March 10. He invoiced me and was paid 1700 for this work.

In October 10 he prepared the accounts for the 09 tax year and charged €242 (incl. vat). Again this was paid by return.

Sorry I dont understand the part of your post about the audit exemption.

kennyb3

Most likely due to an over accrual in previous years, vat and maybe some other adjustment.

Please ask them - your accountant want you to understand teh basis of all figures in the accounts and to feel comfortable signing off on them.

Just ask for a quick explanation by e mail.

seco

kennyb3 wrote: »

Most likely due to an over accrual in previous years, vat and maybe some other adjustment.

Please ask them - your accountant want you to understand teh basis of all figures in the accounts and to feel comfortable signing off on them.

Just ask for a quick explanation by e mail.

Almost certainly a correction of accruals in prior years.

R0N BURGUNDY

99.99% sure its an adjustment for previous years accruals. go back and check your accountancy fees in previous years accounts. compare to what you actually paid.

muffler

Sorry guys Im not sure what you mean by accruals from previous years.

The guy prepared the accounts every year and was paid in full every year.

R0N BURGUNDY

What you pay and what he puts down in the accounts will tend to be different due to the fact that he invoices you after the accounts have already been prepared. ie = the accounts include an amount expensed for accountancy work that hasn't even been invoiced yet. Therefore it is more of an estimation.

So say the following happens:

Year1
Accounts 1000, Invoiced (& paid) 800

Year 2
Accounts 1000, Invoiced (& paid) 800

Year 3
Accounts 400, Invoiced (& paid) 800

Either way, the total of each side is 2400. But in year 1&2 the accounts figure was over-accrued (expensed too much), therefore in year 3 it is adjusted for so that the right amount is expensed over the 3 years.

That is why I suggested looking at previous years accounts and compare to the amount you actually paid.

kennyb3

muffler wrote: »

Sorry guys Im not sure what you mean by accruals from previous years.

The guy prepared the accounts every year and was paid in full every year.

If they accrued (i.e estimated) for €2500 in 2009, then acctually charged you €2,000 and assuming no vat there will be a 500e over accrual.

This will show itself in 2010. This 500e over accrual will come off the 2010 estimte accrued.

So if in 2010 they accrue 1500e, 1000e will actually only show in the P & L account.

Hope this helps

muffler

Thanks very much guys for the detailed replies and I think I understand what you have outlined.

Just to fill you in a little. Without looking back a long time ago I think he used to charge me something like 120 punts + VAT. Since the Euro kicked in back in 2002 he consistently charged me €150 + VAT every year. Then last year (2010) his fee was €200 + VAT as he had a bit more detail or had to adopt a different procedure with the accounts following an audit. I was still okay with his fees btw.

I should also point out that in each years accounts under professional fees he entered the exact amount I paid him which in recent years was €181.50 incl. VAT.

The audit last year resulted in him invoicing me for €1500 + Vat and after a bit of negotiating he accepted €1700 in total. The audit was concluded around May 2010 and I paid him the €1700 in July. In October 2010 he prepared the accounts for the 2009 tax year and he invoiced me for €200 + VAT as stated above. That fee was also paid immediately.

So the part that I cant get my head around is that I paid him a total of €1942 in fees in 2010 yet the accounts he has prepared show that I only paid €700. I cant for the life of me tie that in with accruals.

kennyb3

Ring and ask, we can keep guessing for days but there is an easy way to find out