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 4.1 Choosing an accountant 
 4.2 Working with accountants 
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4.2 Working with accountants
Accountants' fees Accountants & Money Laundering
Ok, so you've decided to engage an accountant. To get the best out of your working relationship you need to understand something of the ethical and legal regime within which he operates. And we'll also look at the thorny question of his fees.
4.2.1 Accountants' fees
Any accountant worth his salt will want to begin your professional relationship by setting out in writing exactly what you've asked him to do, how and when he's going to do it, the basis on which his fees are calculated, and when you have to pay him.
graphic  The traditional method of charging is by the hour. Since you probably have only a very hazy idea of how long it's going to take him to do your accounts and tax and review your tax position, that's not a very satisfactory method of quoting for your work. Increasingly accountants are tending to give you a fixed price for doing your work, although you will still find a lot who will say something like "I could give you a fixed price but you'll probably end up paying more because I'll need to factor in the risk that it takes longer than I expect." I'd say that is a cop out and a cover for lazy thinking. An escort's accounts and tax return need to be completed with care, but it's not rocket science. It's perfectly possible for an accountant to say something like "if you let me have your records before the end of September and they're complete and look like this, then I'll turn the job round inside 30 days and the fee will be £450. But if when you send me your books they're not as agreed then I'll give you a new price and you can either ask me to proceed or you can take them back."
graphic  I would also beware of the accountant who says his fee will be in the range from £300 to £500. He thinks he's got permission to charge you £500 and will probably send you a bill for £450. But you're probably hoping to get charged £300 and expect to be charged about £350. Whatever you ultimately pay, one of you is going to feel cheated.
graphic  Finally, when getting a quote from an accountant watch out for VAT. Most accountants will quote something like £350 plus VAT. That means you are actually going to pay £411.25. So unless you are VAT registered make sure you get a quote inclusive of VAT.
graphic  And remember, you can get tax relief on accountants' fees (unless they relate to a tax investigation which results in you paying extra tax) so the taxman effectively contributes about 28% towards the cost of your accountant (basic rate tax 20%, class 4 NI 8%.)
4.2.2 Accountants & Money Laundering
Accountants and tax advisors are part of the "regulated sector" (along with other esteemed professionals including casino operators and estate agents). That means they are bound by the Money Laundering Regulations which were revised in December 2007. The rules apply to anyone providing accountancy or tax services irrespective of whether they are qualified or not.
graphic  The first thing accountants have to do is carry out something called Customer Due Diligence. Effectively that means that when you appoint an accountant he is going to ask you to provide proof of your identity. He will also want information about your business and your finances, but he would need that anyway to do your tax work properly.
Accountants are also required to make Suspicious Activity reports to SOCA (the Serious Organised Crime Agency) if in the course of their work they obtain knowledge or suspicion that someone has committed one of the money Laundering Offences. These are concealing, disguising, converting or removing criminal property; entering into an arrangement to help someone else acquire, retain, use or control criminal property; and acquiring, using or possessing criminal property yourself.
The one crime that accountants are most likely to come across is tax evasion. But if your accountant believes the information you give him is incomplete or inaccurate he is going to be challenging you on it anyway.
graphic  The other particular issue for accountants advising escorts and other prostitutes is that some of the activities they might be involved in are illegal. Prostitution itself is not illegal in the UK which means that the core activity of an escort or a girl simply working in a parlour is not caught by the money laundering rules.
At the other extreme managing a brothel is illegal so any income from it is the proceeds of crime. Any accountant brave enough to act for someone involved in brothel-keeping needs to take great care particularly where accounts are prepared describing the income as something else.
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