Tax con­sult­ant costs: How much does a tax con­sult­ant cost?

Tax law is com­plic­ated, and many employees and self-employed in­di­vidu­als find them­selves feeling uneasy and panicked when their annual tax returns are due. In many cases, filing tax returns is an op­por­tun­ity to save money on your taxes by deducting certain expenses from the tax due on earnings – however, all too often there is un­cer­tainty about what expenses are actually eligible and to what extent they can actually be deducted. In par­tic­u­lar, in­di­vidu­als who try their hand at filing a tax return for the first time usually have more questions than answers: What, for example, falls into the category of income-related expenses? What private costs count as expenses? What documents need to be kept and for how long?

A simple way to avoid the tax return dilemma is to seek the as­sist­ance of a tax con­sult­ant familiar with the ins and outs of tax law. Your tax con­sult­ant will help you to correctly prepare a complete tax return and with any other tax related matters like an audit – although one should not forget that a tax con­sult­ant’s as­sist­ance comes at a price. To ensure that good advice is not too expensive in the end, you should take a closer look at tax con­sultancy fees in advance, before the fee and pro­cessing costs end up ul­ti­mately exceeding the possible tax savings.

How much your tax con­sult­ant’s fees will cost depends on what kind of tax con­sult­ant you use. A tax con­sult­ant can range from paid software to help you file taxes, a certified public ac­count­ant (CPA), or even a tax lawyer, if you have more complex legal tax issues. In many instances, tax con­sult­ants will be self-employed, but there are also large and small audit and ac­count­ing companies that offer their services. The basic criteria for the cost of a tax con­sult­ant is their expertise and the repu­ta­tion they have built up over the years.

Tax con­sult­ants may charge ad­di­tion­al costs for certain expenses incurred in the course of their activ­it­ies, like travel and sub­sist­ence expenses.

One category of tax con­sultancy costs may cover VAT and the re­im­burse­ment of expenses, and it lists the following specific cost items:

• VAT: This tax may be ap­plic­able to goods and services depending on what type of business you run
• Charges for postal and tele­com­mu­nic­a­tions services
• Document lump sum: Lump sum for pho­to­cop­ies or the provision of elec­tron­ic documents
• Business trips: Travel expenses, overnight expenses, daily allowance, and absence allowance

This general heading covers as­sist­ance in all matters con­cern­ing the tax return – this incurs the most costs from a tax con­sult­ant. Tax con­sult­ant costs for this might include:

• Advice, in­form­a­tion, initial advice: Oral or written advice that is not related to other fee-based activ­it­ies may be charged with a tenth of a fee according to Table A. If it is a first meeting and the person seeking advice is a consumer, the tax adviser may charge a flat fee for initial con­sultancy.
• Expert opinions: Pre­par­a­tion of a written expert opinion eval­u­ation with detailed research and ex­plan­a­tions.
• Other in­di­vidu­al activ­it­ies: For example, if the tax con­sult­ant prepares an ap­plic­a­tion for deferment of tax liability, ad­just­ment of advance payments, or can­cel­la­tion or amendment of a tax as­sess­ment notice.
• Tax returns: Pre­par­a­tion of income tax, corporate tax, wealth tax returns, VAT advance returns, etc.
• Statement of retained earnings
• Surplus cal­cu­la­tion for income from em­ploy­ment, capital assets, renting, and leasing: Pre­par­a­tion of doc­u­ment­a­tion and sup­port­ing evidence for these cir­cum­stances.
• Ex­am­in­a­tion of tax as­sess­ments and par­ti­cip­a­tion in external or customs audits: The tax con­sult­ant may charge a time fee.
• Other meetings/cor­res­pond­ence: The tax con­sult­ant may charge ad­di­tion­al fees for meetings with au­thor­it­ies or third parties in tax matters.

Tax con­sult­ant costs resulting from ac­count­ing support include, but aren’t limited to:

• Es­tab­lish­ing an ac­count­ing system (time fee)
• General ac­count­ing (monthly standing fee)
• Payroll ac­count­ing (various fees depending on the activity, e.g. setting up and main­tain­ing payroll accounts, carrying out payroll ac­count­ing)
• Pre­par­a­tion of financial state­ments (balance sheet and profit and loss account, notes, opening balance sheet, com­mer­cial balance sheet)

The tax con­sult­ing costs for payroll ac­count­ing depend in par­tic­u­lar on the expense of the tax con­sult­ant and/or the pre­par­at­ory work of the client.

If you find yourself in a position where you need legal rep­res­ent­a­tion for an issue con­cern­ing your tax returns or ac­count­ing, you will need to consult a tax lawyer for rep­res­ent­a­tion in appeal pro­ceed­ings before ad­min­is­trat­ive au­thor­it­ies, in ad­min­is­trat­ive en­force­ment pro­ceed­ings, and in court. While costs will naturally vary, it is standard for a lump sum to be paid for judicial as­sist­ance and as­sist­ance in ad­min­is­trat­ive en­force­ment pro­ceed­ings.

There is currently no le­gis­la­tion in place de­term­in­ing how much a tax con­sult­ant can charge for their services. The best thing to do is provide as much clear in­form­a­tion as possible during the initial con­sulta­tion so that your con­sult­ant can give you the most accurate quote possible. Many con­sult­ants and ac­count­ants will offer a free one-hour initial con­sulta­tion.

According to taxback.com, one in three taxpayers in the UK are eligible for a tax refund. The average con­sultancy costs for a personal tax return range from £125 - £175, while a small business tax return averages out at £200 - £300. It is up to you to determine whether or not the tax con­sult­ant prices are worth paying, and whether you will end up with a profit once receiving your refund. Companies and small busi­nesses will pay a higher fee for their tax return, par­tic­u­larly if their tax con­sult­ant also helps regularly with ac­count­ing pro­ced­ures. However, as long as the business is prof­it­able you can save effort and taxes in most cases with the help of a tax con­sult­ant.

Please note the legal dis­claim­er relating to this article.