Help- am I being ripped off??

MiriamF

Hi all,

I would really appreciate if someone is able to assist with my query.

I recently had to make a settlement to revenue of 18,000 on a CGT issue, the accountant (who has been the my parents accountant for a number of years) made the submission and has now sent a bill for 1800 + VAT. I am shocked at this as the work can have taken no more than 2 days. I have queried and am awaiting a response. What I would like to know is a 10% fee of the settlement a normal thing or am I being taken for a bit of a fool.:(

Unfortunately we did not agree a fee in advance but there was not a lot of work to be done on it was very straightforward.

Thanks

Alan Shore

A settlement with Revenue would indicate that you were subject to a Revenue Audit.

You need to clarify what the nature of engagement involved. If you sold a house and it was very straightforward then yes €1800 plus VAT is a lot please clarify.

MiriamF

Yes there was a house sold in joint names almost 5 years ago. I ignored the letter as it was a family home but as my parents were joint owners they were subject to CGT on their part. It was straightforward, Revenue came looking for the settlement and said they would audit my parents if it was not paid. The accountant settled a figure with them (did not impose full penalties but we had disputed as my parents did not benefit from the sale they were joint owners due to bank guarantees) I have asked for the amount of work carried out but seems very excessive.

Alan Shore

MiriamF wrote: »

Yes there was a house sold in joint names almost 5 years ago.

I ignored the letter as it was a family home but as my parents were joint owners they were subject to CGT on their part.

It was straightforward,

Revenue came looking for the settlement and said they would audit my parents if it was not paid.

The accountant settled a figure with them (did not impose full penalties but we had disputed as my parents did not benefit from the sale they were joint owners due to bank guarantees) I have asked for the amount of work carried out but seems very excessive.

There are a lot of issues there and sometimes it's not just about the time but the ability of the accountant to negotiate a settlement in your behalf.

Was your accountant aware of the joint ownership of the property when preparing your parents tax return.

Clearly you were aware that there was an issue. When you say you disputed their liability, with the accountant or Revenue?

If they provide a guarantee for your loan then they don't own the asset, if they were joint owners then they had a gain. Where did the proceeds go? Assuming that the loan on the house was less that the proceeds.

MiriamF

There are a lot of issues there and sometimes it's not just about the time but the ability of the accountant to negotiate a settlement in your behalf.

Was your accountant aware of the joint ownership of the property when preparing your parents tax return. Yes he was, our solicitor was also involved.

Clearly you were aware that there was an issue. When you say you disputed their liability, with the accountant or Revenue? We disputed it with our solicitor and accountant who both advised that we had to pay.

If they provide a guarantee for your loan then they don't own the asset, if they were joint owners then they had a gain. Where did the proceeds go? Assuming that the loan on the house was less that the proceeds. We joint owned it as we purchased land with it and split up all the property verbally before the sale not on paper. I had renovated the property and then sold it on, the profits went to pay off the loan and I gained financially. They gained 2 sites on the peoperty

nompere

Revenue audit work tends to command a premium - you can't leave it to junior staff. If it took 2 days work, then that equates to an hourly rate of €120. To be honest, that's quite modest. In a medium sized firm an hourly rate for that sort of work would be well over €200 per hour. Go to one of the big firms and you're looking at €300 and more per hour.

The fee isn't usually related to the settlement - otherwise we would all be trying to increase the tax bill!