What can't an MIP do?

rwp

I have read through the forums, and can see that MIP can't do Audits or Insolvency, but what about signing off mortgage references and Independent examinations?

I completed my AAT qualification 3 years ago and have 5 years experience in practice doing everything from Audits, sole trader accounts and large limited company accounts as well as tax planning etc.

I am considering registering as a MIP and setting up my own practice, my worry is what will happen if someone needs a mortgage reference and the bank does not accept the AAT qualification, do other people have this problem? Do people have a relationship with an ACCA/ACA accountant to sign things off like this and they pay them a fee?

I don't want to start a big debate about who should call themselves accountants, but is there anything to stop me setting up a company called say 'XYZ Accountants', under the MIP scheme?

Also does anyone have any general advice about going it alone, what pitfulls have you come across etc. What have you found to be the most succesful way to attract new clients, what unexpected costs have you come accross.

I feel confidence I could set up a succesful business, but its the worry of taking such a leap when you have a family and a mortage to think about!!

Any advice would be very much appreciated.

Many thanks

burg

Hi,

As an MIP you can perform Independent Examinations (if you have the relevant experience) and give mortgage (loan) references which most lenders accept. The only problem I have encountered is Santander.

I too have a family and mortgage to worry about so I decided to see how things would develop by starting out running my practice alongside my day job (in practice) to build up a small client base. (Do check your contract of employment though about any restrictions in setting up your own practice).

I then went full time last year when I had around 25 accounts/tax clients and around 5 bookkeeping. I set up an arrangement with a local bookkeeping & Sage training firm who do not undertake accounts/tax work. They took over my 5 bookkeeping clients and have passed accounts/tax work my way. From this I have gained around 25 clients in the last year.

A localised Google adwords campaign has worked well for me also. I am currently getting around 5 enquiries per month from this of which most turn into clients.

Others come through word of mouth which obviously costs nothing and gives yourself reassurance that you are pleasing your clients.

I have tried others such as mail shots, local magazines, shop windows etc but the return is very low. Others may have had different experiences though.

There is no restriction on calling yourself 'XYZ Accountants' although I don't think you can have 'Accountants' in a limited company name (not 100% on this though).

One piece of advice would be to think about the types of client you want to act for and those you don't and those who are ok but not ideal. Make sure you stick to it and you will have a practice that grows nicely. Most of us have made the mistake of not knowing what we do or don't want and ending up taking everyone who comes knocking taking on bad clients who are a nightmare.

I would do some research into software. Start by looking at whatever you have experience with. If it's Iris, Sage or similar then it may be too expensive to start with. Most go for something like VT with Tax Calc. Great for keeping costs down but (in my opinion) not as easy to use as a good integrated software.

I'm sure there will be others along with anything I have missed and different opinions.

Best of luck with your venture.

rwp

Hi,

Thanks for your reply, lots of useful information.

What have you done when you have a mortgage reference for a client with Santander, have you got a relationship with a Chartered accountant to sign them off?

Unfortunalty I could not start up part-time in my current position due to my contract of employment, I am studying ACCA at the moment, but have lost a bit of motivation for it, I think I would prefer to be able to offer a really good service to smaller businesses with my AAT qualification, than have another 2-3 years of study ahead of me, then post-qualification experience before I set out on my own.

Another question, what have people done about VAT registration? obviously to begin with for the first few years I would be no where near the threshold, but I would hope to build up my practice so that eventually it would turnover more than the threshold. Have people registered straight away so that their clients are used to the fact that they are VAT registered, have you swollowed the extra costs when you do register for those clients who are not registered for VAT?

Sorry for all the questions.

Many thanks for everyones help

burg

Regarding the ACCA qualification you will only know what is going to suit you best.

when I decided to go full time I was also in the middle of studying ACCA. I wasn't happy at the firm I was at and was deciding where to go forward. I had been waiting on one firm for around 3-4months who said they were still sorting out what they were doing.

Based on a few opportunities that came up I decided to take them and go full-time just using my AAT so I had to resign from ACCA. Some may say it was foolish but redundancy was on the cards as well so I would rather jump than be pushed. I don't think it has held me back at all just being AAT. Anyway in the middle of my notice the job offer came from the firm from before but I had made my mind up. If it would take them nearly 6 months to offer me a position how long would anything else take? Don't forget that the post qualification experience for ACCA needs to be with a ACCA approved employer which may mean changing jobs.

I knew I was happy with my decision and still am. I don't think it's right for everyone but only you can really know. If ACCA is what you really want then stick with it as it will be worth it in the end. There are many who would love to be in your position. On the other hand if you know you can succeed without the AAT and you are sure of it then it may be worth a go as long as you understand the risks and what you are giving up.

I have only had one mortgage from Santander who were happy to accept copies of the last three years tax returns (strange that beings I did them). This is something the AAT are trying to argue and hopefully something should be sorted.

I have not registered for VAT but it may well be something that I need to consider over the next 12 months. Most of my clients are VAT registered so it won't make too much difference to them. For those who are not I may do something like increase absorb some of the cost myself and charge some to them. Depends on each client and how I think they would take any increase.

No problems with the questions, sorry for the long answers.

rwp

Sounds like I am in a very similar situation that you were in. I do realise that I am fortunate to be in a position where I am being given the opportunity to study ACCA, but I am not happy with the firm that I am working for, and I don't feel that the ACCA would qualify me for the sort of work that I want to do.

I enjoy helping small/medium size businesses with their accountancy/tax affairs, and feel the AAT qualification, CPD and my experience would be quite adequate to do this.

Thank you for your answers they are very useful, I have been looking at VT accounts and Taxcalc and they are far cheaper than using IRIS, mainly as you can have unlimited clients with them. Have you/anyone had any experience with using these programmes?

Many thanks again

burg

I have used VT and Tax calc when I was part time. I was used to using Iris also but couldn't afford or justify there fees.

VT and Tax calc are great for the money but aren't (in my opinion) as easy to use and as good as an integrated suite. However integrated suites do cost money.

I moved on to PTP for a year but found the programme a little clumsy still and the prices increase quite a bit with growth. I didn't see myself staying with them long term.

When I went full-time I decided to invest in integrated software to speed up processes and have something that will be good for the future. I shopped around trying lots of different ones (Iris, CCH, Sage, Digita, Keytime).

When I weighed everything up I settled on Digita. Very good from the outset. Most willing to help with good demonstrations and I generally felt they were interested in my needs. The price is somewhat similar to Iris in year one but is around 60% of the cost in year 2 (in year one you pay for membership and licences with just licences in year 2 onwards).

A great piece of software that I regularly recommend. I still get great support from them and am always in touch with my relationship manager there.

If you are used to using Iris it is certainly worth looking at even if it's something you move to when you have a more regular income stream.

As you say it seems as though you are in a very similar situation to what I was in. I feel I made the right decision for me and I haven't looked back and certainly don't regret it. I was aware of the risks but was happy with that and was confident I would succeed.

Best of luck with what you decide.

I have also sent you a PM.

rwp

Ifa

Hi, sorry to have not commented on the forums for a while, I do keep an eye on what is being said as I like to keep up to date!

I have been looking into the IFA, does anyone have much experience with this institute, I seem to remember someone saying that Santander do not accept mortgage references from an MAAT but they would from an AFA? Is this true?

I am looking into the possibility of transffering the study that I have done so far with the ACCA so I could get a another qualification, has anyone had any experience with this?

Many thanks for all your help as always

Kind regards

Monsoon

My business partner is an AFA and yes as far as I kno Santander do accept IFA accounts. I believe the qualification is a similar level to AAT and I wouldn't feel the need to be AFA and AAT.

Regards VAT, we registered a few months ago and decided to just add VAT and hope for the best. No-one has complained and we have a number of unregistered sole traders. We did give warning to let then get their year end done before we registered though, to save them for one year.