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Which area of tax shall I specialise my practice in?

Hello all

I started a practice a couple of years ago and got some great advice from this forum. Growing the practice has been challenging and I've realised that being a general practitioner in London means that every other practice is my direct competition. I regularly advise my clients to specialise in a niche so as to trade on expertise and service rather than price alone and figured it was time for me to follow my own advice. 

My clients are currently micro-businesses and small businesses. The largest has a turnover of around £2 million but most are closer to £250k. Winning clients is really tough as our approach is quite similar to a couple of much larger firms in the area, which means that price becomes the number one negotiating tool. I could build up a practice of price-sensitive clients but with the practice still small (less than 50 companies), I want to explore other avenues.

I was thinking that, if I specialised in an area of tax, I could take on larger clients for short consultancy work or on a retainer. The only problem is that there are so many options. I have looked into corporation tax, capital allowances in the real estate sector and international VAT as options but have no feel for what the competition levels are like or the earnings potential.

Does anyone have any experience of specialising in an area of taxation? Which sector would you target and why? Which area of taxation do you think is best to target? Which area of tax is most financially lucrative?

I will of course be looking for training next so any advice on that would be very handy too. I don't mind having to train for a couple of years as I am certain that being a  general practitioner with hundreds of small clients, each pushing me for every penny, is not the way I want to go.

Thank you 



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25th Jun 2012 10:01

Personally I would pick a couple of areas you like

and then do a little research on the competition....most general practice firms offer advice in all areas whilst not having the indepth knowledge.... but the bigger firms will probably have specialist departments.  You need to find something maybe the smaller firms will need help with and perhaps some personal clients who will come directly for your assistance. 

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25th Jun 2012 10:20

Wrong way round

Generally speaking, you don't usually find your niche by looking to see which area pays better but rather a combination of the areas they have been exposed to and what interests them.

It seems to me it would be nigh on impossible to go from a general practioner dealing with SMEs to a specialist in International Vat say. What would qualify you to do this? Where would the experience be obtained?




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25th Jun 2012 11:41

Wouldn't specialising in client type be easier?

Would you not be better in specialising by client type rather than by tax?  That way you keep a long term core of clients - your bread and butter.  If you specialised in a particular type of tax, you'd get lots of smaller one-off jobs, mainly clients of other firms who have a particular problem.

I tend to specialise in IT contractors and other personal service companies - i.e. I do everything they need, i.e. company formation, setting up VAT & payroll, online accounting, annual accs and returns, and IR35 reviews etc.  I suppose I could specialise only in something like IR35 reviews, but I'd prefer to do the full range of services year in, year out.  I've streamlined the process so most PSC clients are using the same book-keeping system, and I've a library of factsheets and standard query replies, so that I can easily answer client questions/emails, etc in a standard form with standard answers to keep all clients singing to the same hymnsheet - that means that time spent is minimised which in turn means that I can make a premium return even on competitive charging.

Another local sole practitioner decided to specialise in small firms of IFAs - he advises on how to get the FSA authorisations, the pros and cons of each level of authorisation, etc., completing the online FSA returns, FSA audits when needed, all in addition to the usual accounts and tax preparation and planning.  He's now regarded as a regional authority on IFAs and has pretty much cornered the market for IFA practices around here and charges a fair premium for his industry expertise.

Likewise, there are firms who specialist in doctors and dentists which is another niche area which again is rich pickings if you systemise so as to minimise your time.  Same again with pharmacies, nearly all of which operate the same way.  Once you've learned how the funding works and understand the NHS schedules, and know the major suppliers & how it all operates, you can apply the same knowledge to multiple clients without the initial learning curve.

I remember probably 20 years ago, I was working at a small firm of accountants.  We had a client who was a Peugeot main dealership.  It was about the time when they were computerising, so I had to install a Kalamazoo accounting system (Peugeot insistence) which would communicate via Modem for parts ordering and warranty claims, and also fill out the monthly "Allison" management reports for inter-firm comparisons.  It was a massive task and took months with a lot of pain involved for all, but once it was done, up and working well, the dealer principle was happy and he recommended our firm to other Peugeot and other garages (other dealerships used the same system) who were struggling with the new system implementation.  We ended up the regional "experts" and made quite a number of successful installations, all based on the knowledge we gained in the first job, and picked up the year on year accounts and tax preparation for several as well.  We ended up specialising in motor dealerships which was never the original intention!

I'm not really sure that you're starting out in the right direction, i.e. you seem to be wanting to randomly choose a niche and then aiming to train yourself to be an expert, without any real experience.  I'd say that most experts fall into their niche by accident, like that firm with the motor dealerships - you work on a particular client, or client type, build up your knowledge, and then you're qualified & experienced to offer yourself out as an expert with a proven track record.  

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25th Jun 2012 12:38

variety is the spice of accountancy

one of the only things going for GP is that you get to meet people from all walks of life & business.  But if you must specialise and retain a variety, as everyone needs it at one time or another, try inheritance tax.  But make sure you have lots of hobbies as well!

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25th Jun 2012 12:53

What's most relevant to your current clients?

Surely the easiest area of tax to specialise in is that which is most relevant to your current client base?

That way you can continue to attract the clients you are used to serving and who you can offer specialist tax advice to.

Perhaps this will help you stand out from the competition and compete on quality of service (and tax savings) and not price?

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25th Jun 2012 14:00

I need to do a lot more thinking

Thank you to everyone that has responded so far. Asking the questions here has been really valuable and I think you're all right - which makes me wrong :-(

In particular, specialising in a sector might make the most sense as both the IFA and the car dealership stories look like they're already happening to me.

I also like the idea of supporting smaller firms with a specialism. A question on that; when do you go out looking for help from a specialist? I tend to work through pretty much everything myself, even if it takes an age to get through the reading, as I take the view that if it's come up once, it'll probably come up again.

My logic on the tax side was that it is interesting, lucrative work and if I trained in it, I could start marketing to steadily larger firms and perhaps the first few jobs would be sold at a very low price so that I could gain real practical experience. From all of your comments, perhaps that plan is too naive...



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By plummy1
02nd Jul 2012 14:21

Capital Allowances Claims

Most accountancy practices unless they are fairly large do not specialise in capital allowances claims on commercial property but do use the services of specialists in this area for the benefit of their clients.

My experience is if you do have clients with commercial property or have re-developed leased property then you should investigate a claim. If you want to capture new clients this is a service you could offer and as the majority of accountants still seem to ignore this type of work you may well find yourself winning more business off the back of it.

John Plumridge

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02nd Jul 2012 19:45

Tax Specialisation

As an alternative to investing maybe years of personal training, and building a business that is reliant purely on you and your knowledge, have you considered partnering with a panel of specialists for you to work with?  This will give you the niche you need, at the price you seek, without the huge time and personal investment.  Granted you wont see all of the profit but you could work on number and price as the business model.  Also would increase your accountancy client base through greater service offering, niche marketing, premium clients etc.


Jason Dormer

Seahorse (UK) Ltd - For Accountants and Bookkeepers

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