Fair accounting fee?
Question from Ryan updated on 7th June 2015:
My accountant is charging $1,000 to do a tax return on my house, I believe this is way too much? Does this sound a fair price? What other options do I have?
Our expert Mark Withers responded:
A national survey of 50 plus chartered accountancy firms recently published statistics suggesting the average fee per client charged across the participating firms is $3,071 plus GST. Bear in mind that a chartered accounting firms largest cost is their highly qualified staff who typically earn incomes of between $50,000 to $200,000 depending on experience and take about 10 years to train. They are individuals who are employable anywhere in the world and competition for their skills is global. Chartered accountants must also observe a code of ethics, maintain high professional standards, undertake continuous learning and up skilling, and submit to rigorous practise review processes. Their work is complex and exacting in a roller coaster environment of ever changing tax law set both by parliament and the courts. It's also high risk and extremely litigious which is reflected in extremely high professional indemnity insurance premiums across the sector. It is possible to buy cheap accounting and tax services from non chartered accountants who don't have to meet these professional standards, it's up to individuals ultimately to decide if these standards are worth the extra cost. Watch out also for firms "outsourcing" tax compliance work, yes, believe it or not, an increasing number of firms cut costs by sending your papers off to India for processing where the labour is cheaper, how much the foreign workers actually know about NZ tax laws though is a bit moot. Accountancy is a game where small mistakes can be very costly. In the scheme of things, is $1000 really a lot to spend once a year on something that has such a direct impact on the money you get to keep in your pocket? Remember the old saying, good, quick, cheap ... you will only ever get two out of three!
Mark Withers and his team at Withers Tsang & Co specialise in advising on property related transactions, valuation and restructure services and tax planning.