Wednesday, December 19, 2007

I hate it when my clients pay................. TOO MUCH TAX

Last week I took on a client who had been using the services of a major accountancy practice in Reading for a number of years. The firm in question are a very good practice with one problem - they don't seem to look after their "smaller" clients very well. I can understand how this happens becasue I have worked in larger firms in the past and have seen this myself.

I checked over the latest accounts figures and was horrified at what I saw!

The accountancy fee for one was huge! But the biggest problem for me was the claim for using the home as an office.

Now this particular business is operated exclusively from home and uses two of the rooms in the house. So there is a potential to make a substantial claim in the accounts as there is legislation which allows this. I had one client where we claimed over £6,000 each year for this.

And how much had the "other" accountant claimed? A measly £240! Yes thats right - £240 for a years use of the home as an office.

I made some quick calculations and worked out the claim could be as much as £4,000 each year. Now that equates to around £1,600 in tax for a 40% taxpayer plus national insurance. repeat this every year and it turns into many thousands of pounds of tax paid which isn't necessary!

My point is that it actually feels like I am paying the tax when my clients hand over their hard earned cash to the tax man! You work hard for it - my job is to help you keep hold of it!

A bientot!

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