Is your accountant saving you enough tax or costing you too much ?
I’m going to share a ittle true story with you today – we took on a new client recently who felt he was paying too much to his current accountant and also felt that both himself and his wife were spoken down to when they queried the annual accounts. He also felt that he was not getting any good advice – turns out he was right – he just didn’t realise how right he actually was!
First of all he had never been told about the possibility of claiming the civil service mileage and subsistance rates – he had never even heard of this – in his particular circumstances, because he used his personal car extensively for business purposes and also spent a lot of time working away from base he was actually entitled to claim circa €16,000 p.a. tax free from his company – over the previous 10 years he had missed out on circa €160,000 of tax free money!
As if that were not bad enough he had also been told by his former accountant that his wife was not entitled to maternity benefit – she was a 50% shareholder of the company and did work in the business and was insured under PRSI class S – the self-employed stamp – the former accountant incorrectly told them that the class S stamp did not qualify for maternity benefit and so they never applied for it – however, it certainly does qualify – the client missed out twice on maternity benefit of circa €6,000 each time – and at the time it would have been tax free!
To round things off we were also able to cut his annual accountancy bill in half – yes half – first of all he was being overcharged (as he thought himself) but also we were able to show him a few simple steps he could do himself to cut down on our time and bring our fees down accordingly – as you can imagine he is now a very happy client and has since referred 3 more clients to us – what goes around comes around as they say!
Dave Howick, F.C.C.A, Partner at FHM Accountants