Has accountant overcharged me?

My wife and I Have been using the same accountant for the last 6 years and had a good relationship with him until this year.

He has charged me over $1000 for my tax return. I have questioned it and he is adamant he hasn't overcharged and it took him 9 hours to complete. I believe this to be impossible as my situation has not changed from the previous 2 years (no CGT events or purchases to calculate) and we are normally charged around $300 each. I add up all receipts and compile a spreadsheet for him before taking it to him, it's a pretty simple PAYG and 2 investment property return, that hasn't changed much if at all over the last few years. I correct his errors as well.
Due to a pay rise half way through the year, I paid more tax and relieved a larger amount back then previous years.

I have been very reasonable in my approach, at first I thought he had made an honest mistake but he is adamant it took him 9 hours to complete my return, and 3 hours for my wife's.I find that unbelievable, every other year has taken him around 3 hours, and our situation has not changed at all in the last 3 years (no CGT or purchases, nothing at all!). It's a PAYG with 2 residential properties, no SMSF or anything tricky.

He is not willing to show me his actual time sheet (just telling me he has added up the hours) even though he was holding his diary when I was speaking with could have resolved the issue there and then.

He initially said he had to re do my return because I "added" something after he completed it - I picked up a mistake he had made with an amount before signing so he amended it, definitely not "redoing" my return (which he agreed was the situation) He has not been able to tell me why my return would take 9 hours for him to complete.

I am obviously unhappy and disappointed with his service. He had basically told me to get stuffed, which I will be doing, but I would like to get some of my money back (yep, the tax office pay him, he returns the money to me after taking his $1000 so I'm chasing him for the money).

My questions are -

Is it possible my return actually took a whole day to complete?

If not, apart from going back In and demanding to see evidence of the 9 hours it took him to lodge the return, what other steps could I take to pressure him to return some of my money?? I think he is just taking advantage of my larger tax return and hoping I wouldn't have noticed his $1000 bill.

What would you do in my situation??

Cheers
Alex
 
It does sound unreasonable. I used to work in small business tax and did a lot of these kind of returns.

As a graduate, if i spent more than an hour on this type of job I would have been told to improve my efficiency. Reprinting and stickering returns should take less than 18 minutes (we used to bill in 6 minute blocks).

There can be a few things that would hold up this kind of return but 9 hours sounds ridiculous.
 
That is ridiculous. My last return was very similar to yours - and my accountant did an amazing job, provided great advice and charged me a whole $145. He'll charge my partner the same.

Picks up calls on weekends/whenever i need him and i can't imagine him ever telling me to get stuffed, even if i question him on something.

Cheers,
Redom
 
These are often difficult issues to resolve. He wont share his diary and nor should he. However he must account for the time if he charges a fee based on time. That time record should address any non-standard extra effort or checking etc. The fee should be consistent with last year - If not why was there no call ?? That's really not acceptable.

We often encounter client matters that can be very time consuming. The client thinks its all straight fwd but their info is poorly organised or they send me a stack of files. I have to open, review and file each one. Or their so called summary is inconsistent with last year etc. I will always stop but if you have agreed to a n hourly rate he may just charge ahead. That's wrong...Like a taxi driver taking the longest route.

Your next steps should involve two steps as a guide:
1. Arrange a time to meet again and review what the issues were that made the cost so large v last year. If he cant demonstrate then the fee may be at risk. Just be clam and stick to your guns. Why didn't you get advance notice of this etc ?
Fee disputes aren't normally a matter a professional body will become involved with unless it is misleading etc. Then its a professional conduct issue. In which case you can often have the matter reviewed. What were the term of the engagement ??

2. Time to find a new accountant. The relationship has ended. Maybe that's why the fee went up. I have seen practices do this.

I do something many accountants dont. I like to work to an agreed fee. It is subject to extra or new issues of substance. It encourages clients who summarise and help. I feel it can be fairer and imposes the obligation on me to be efficient and accurate. Rework or extra time due to me not interpreting your info etc costs me - not you. I do maintain timesheets and can tell you how long it took and identify every issue that I feel is an exception. Next year may cost more but unless I warn you this year won't. And if I can retain you next year may even be lower !! I often use that information to re-educate clients in learning how THEY can save money next year.

If a client provides poor records I make a point to stop, call them and explain why before starting. They can fix it or accept a extra charge for the extra work. Their decision.

I also NEVER do a fee from refund. Its your money - It goes to your bank account. Its also costly for you. And no card surcharges etc. The only catch I have is I wont lodge until I'm paid. Its my only security.

Hourly rates a bit like walking into Bunnings and paying for timber by the kilogram.

As a guide using my SS pricing I would think with PAYG + 2 IPs etc around $450 all up for both of you if you provide reasonable summaries. But I also know some who would charge $2K for this same work. City based firms, large firms etc often charge more too.
 
I think Paul's advice is good to arrange a face to face. There could be a perfectly reasonable explanation... or not.

If not, the next thing to consider is lodging a submission in writing. I have been overcharged (IMO) by an accountant and a lawyer. In both cases I lodged detailed submissions with the relevant responsible person (for the accountant it was the head of the firm and for the lawyer it was the partners). I forget what happened with the accountant, but the partners cut the lawyers bill in half. The submission to the law firm was 18 pages long and included advanced document analysis and detailed reasons why the bill was higher than it should have been, including the fact that I had written half the documents that I was being billed for :mad: It took some time to put together but I was broke and needed the $6k. It was great to see the new invoice come back at half the price! :)
 
Alex, your accountant would most certainly be a member of the CPA or CAANZ (previously CA).

If you have not resolved your dispute with your accountant you can lodge a complaint with their professional body who can investigate for you. You may not get everything you want, but you will at the very least get some form of resolution if you can accurately (with some measure of evidence) state your case
 
Thanks got the great replies, definitely need a new accountant.

It's a mum and dad operation and I have been happy with the service and never questioned fees before. I have no agreement with them and very little evidence to back up my case (he says it took 9 hours, I can question but can't prove it didn't) but would like to apply a little pressure by mentioning the CPA and ombudsmen.

I may have to write the money off and put it down as a learning experience. The breach of trust and frustration is worse then the financial loss, just because you think someone wouldn't screw you doesn't mean they won't!

They are in their 70s so may be about to retire and close up the shop.

What's annoying is I asked if I could claim an overnight allowance this year (I am away for work 70-90 nights a year) and he said yes I could. I could have been claiming this for the last 6 years... That's right I suggested it, so no real advice from them there! Worth amending previous years returns or does that raise red flags with the ATO?? I have copies of rosters etc as evidence.

Alex
 
Thanks got the great replies, definitely need a new accountant.

It's a mum and dad operation and I have been happy with the service and never questioned fees before. I have no agreement with them and very little evidence to back up my case (he says it took 9 hours, I can question but can't prove it didn't) but would like to apply a little pressure by mentioning the CPA and ombudsmen.

I may have to write the money off and put it down as a learning experience. The breach of trust and frustration is worse then the financial loss, just because you think someone wouldn't screw you doesn't mean they won't!

They are in their 70s so may be about to retire and close up the shop.

What's annoying is I asked if I could claim an overnight allowance this year (I am away for work 70-90 nights a year) and he said yes I could. I could have been claiming this for the last 6 years... That's right I suggested it, so no real advice from them there! Worth amending previous years returns or does that raise red flags with the ATO?? I have copies of rosters etc as evidence.

Alex

Overnight allowances can be a funny thing. Some may have deductions avail - Some no..

If the employer pays a per diem overnight allowance then THEY can choose if this is shown on a PAYG Summary. Its easier if it is. If they do you may be eligible for claiming a deduction at a set daily rate for the location you travelled to...provided you actually stayed overnight AND incurred hotel / motel like costs. ie no tents !! There is an annual tax ruling that covers this... 2015 is http://law.ato.gov.au/atolaw/view.htm?docid=TXD/TD201419/NAT/ATO/00001

Can you claim more than the allowance - Yes. That's the point
Do you need receipts - No. But you may need to prove you incurred eligible accom costs. A single receipt for the accom is enough.
Can I stay in a dodgy motel and pay $50 and still claim $189. Yep.
Can I sleep in my car etc...no.
Can three of us bunk down together and each claim...Yes. Keep a copy of the invoice and write names of who stayed.

Then there are overnight allowances for the likes of truckies and soldiers. Its paid as a "hard living" allowance to compensate for the conditions. No deduction is available. This can also happen with remote allowances for FIFO and live in miners.

Well worth getting it right as its a high risk for the taxpayer AND the tax agent. Recently a tax agent was found liable for recklessness for just claiming a deduction and not checking on a truck driver who was paid the allowance if he worked after 7pm...He slept in truck. No deduction. Receipt of an allowance doesn't always equal a deduction.

Review to amend last two years. Yes. Maybe even four years. Not five or six though. Out of time.
 
So he has overcharged me. He had added a 0.5 as a 5.0 which brought my return from 5.0 hours to 9.5

Not a great look for an accountant!

Thanks for all the helpful advice.

Alex
 
So he has overcharged me. He had added a 0.5 as a 5.0 which brought my return from 5.0 hours to 9.5

Not a great look for an accountant!

Thanks for all the helpful advice.

Alex
:eek:

That's a worry. So, how did you get this resolved, phone call, meeting, in writing?
 
So he has overcharged me. He had added a 0.5 as a 5.0 which brought my return from 5.0 hours to 9.5

Not a great look for an accountant!

Thanks for all the helpful advice.

Alex

That's a worry. Something like that should be picked up by the accountant when doing the account, before it gets to you.
 
youd think that if a client was questioning charges, PLUS the return costs had doubled or trippled, youd actually double check a few figures, for a bit of common sense,

plus being an accountant

maybe its an old person thing
 
Thats why hourly charge rates are ridiculous. An upfront fixed fee should be agreed and work to that. No surprises then.

most clients tend to ask many questions during the year so expecting a cheap return with advice and an accountant tells me a few things.

1. They are an unsuccessful business person. Business means making a profit.
2. They dont have other businesses because if they did they would know time is valuable.
3. They generally arent up to date and that might burn their clients later.

Lots of cheapie accountants out there. Ive got around 12 business interests to manage and providinf freebie advice isnt one of them. Somersoft I do to give back what I learned back in 1998 and made me extremely wealthy. Its a thanks to jan and ian.
 
Our fees

My husband and I have been charged base $170 each, $150 business, $80 for first IP just in hubby's name, $50 each for 2nd, 3rd and 4th IP in both names. I supplied the spreadsheets, depreciation reports, business totals, interest etc.
3 IPs were new this year. Does total of $870 sound reasonable for this?
Last year hubby paid $220 for his business and 1 IP with a different accountant.
 
Depends. Will the new accountant assist with ongoing advice.

Do they have experience dealing with property investors and property developers ? Longer term will they help will asset protection, estate planning, tax minimisation, structuring, smsf etc ? Are they well versed in the many types of structuring.

Do you want to enter into joint ventures or developments in the future ? Can they help with the myriad of issues ?

Do you want a tax effective income stream in retirement ? Do they know how to structure things years earlier to achieve this ?

Could be very cheap or very expensive depending on those answers.
 
Back
Top