2014/15 tax returns

2014/15 tax returns

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Having had my busiest January ever and being that it could have been avoided with better organisation from my part and more consideration from my clients, I have decided I need to change things for 2014/15.

Would anyone be able to share what they have been doing in this regard, what worked and what didn't work and any changes they intend to make for 2014/15?

I note some accountants charge a premium for books coming in late (ish) and send out regular reminder letters. Would anyone be able to share the wording they used in such letters, particularly the additional fees paragraph.

Thank you in advance for any advice given.

Dave

Replies (17)

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By bigdave1971
02nd Feb 2015 14:30

No-one going to help me out ... sob sob :(

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Teignmouth
By Paul Scholes
02nd Feb 2015 15:53

Oh go on then

Hi BIGdave - as I wrote on another thread recently, and have repeated several times over the years when this topic arises, the magic bullet we put in place 7 years ago, that dramatically turned things around, was to give clients 3 months from the tax or accounts year end to get their info to us.

Before this we had followed the policy of telling clients that if their info wasn't with us by 31 October then we couldn't guarantee hitting the 31 Jan deadline, so what happened?  50%-60% of client info arrived in the last few days of October and 10%-15% arrived December/January meaning that we had to cram say 70% of the year's work into 3 months, plus, because several would rush to get us the info, we only discovered they'd missed stuff in December/January meaning we had extra grief putting down & picking up jobs partially completed whilst we chased them.

Ring any bells?

One of my clients is a psychologist and when discussing it with her she said you can use as many stick & carrots as you wish but what the human wants is a deadline to work to, so, in our case that was 31 October or 31 January so all we did was turn the 3 months on its head and give them this period to get us the info.

Nobody, and I mean nobody, complained and, ironically, the really bad culprits, who had suffered stress, panics & guilt trips over all the months they put off looking at their paperwork were over the moon at getting it out the way before the summer hit.

We still get some who can't hit it or who miss some stuff but they will call and ask for say 2 weeks extension or we have loads of time to check and get back to them

So, since 2008, we've been getting 70% to 80% of client info by 30 June-5 July.

To add some incentive we also changed our charging structure to add a % of our annual fee if stuff came in late, eg 10% for 2 months, 30% for next 2 months and a complete re-quote if more than 7 months late and that we wouldn't do the work at all if it clashed with more important work or if it arrived in January.

But, as predicted by the psychologist, we've hardly ever had to make use of this, ie it's the deadline that makes all the difference. Plus, I have to be honest and say that, with the small number who ignored it, I was far more keen to get rid of them than doubling the fee, as I did on a few occasions.

It is important to reinforce this and so, when we send out the tax return checklist or year end "what we need" list we remind them they have 3 month, then send further reminders at the end of April and May...eg "Only one month left".

The downside?  Our busiest period is when the sun is shining rather than in the cold months.

 

 

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Man of Kent
By Kent accountant
02nd Feb 2015 16:28

Live with it.

Judging from some comments on other threads it seems to me that there are plenty of accountants with [***] all to do before tax season hits and then they're rushed off their feet for 2-3 months.

Really? I'm busy all year round. Yes the volume for me was slightly higher than I would have liked this January but overall it was just the mix of work that changed compared to previous months - more SATR's and less Ltd Co accounts and CT600's.

The rest of the year is pretty constant. I try and plan work several months in advance and request data in advance so that at any one time I have 3/4 sets of accounts ready to work on.

The vast majority of my clients trade through limited companies.

So for those whose annual accounts covering the tax year have been completed, I'll do the SATRs when I do the accounts. For others I'll get part year accounts information as and when I prepare the SATRs.

So next year will be pretty much the same as this year - around 50-60% of all SATRs will be done in January.

I'd far rather be working long hours in the dark winter months rather than the summer.

 

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By bigdave1971
02nd Feb 2015 16:32

Very interesting

Thank you very much for your time, Paul.

I did think that by giving a 31 October deadline for instance would mean clients would "throw in" a few bank statements and invoices and say they have met the deadline which is nearly as bad as getting all the information in one go, a month or so later.

This year about half the books came in fairly evenly between 5 April and 31 October, about a quarter in November and December and the other quarter in January ... which is a nightmare.

I can't see the 3 month deadline working for my clients (at the moment anyway) but I am very impressed that you have made that work.

I wonder if I could have different deadlines or is that not fair. In other words the first batch who currently get their books in by 31 October could have a 30 June deadline, the next batch who get them in by Christmas have a 30 September deadline and the last batch have a 30 November deadline.

I'm probably being too soft which is probably part of the problem anyway.

 

 

 

 

 

 

 

 

 

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By bigdave1971
02nd Feb 2015 16:35

Thank you for your reply Kent Accountant.

I understand your comments and I too have a good number of company accounts to do throughout the year so I am never idle but I just think the tax season needn't be so, well, taxing.

 

 

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Teignmouth
By Paul Scholes
02nd Feb 2015 16:58

Looking after number 1

In the old days we'd have a good cross-section of company year ends however, over recent years 95% have been, or changed to, 31 March.  We used to think that it would be a nightmare bringing all the compliance work into the same time frame but I actually prefer it.  As KA says you can get both the company accounts and personal returns done all at once whilst the facts & figures are still fresh.

Dave (if I can call you that) 3 months is more than enough time for a person or company to have their stuff ready. It took me years to realise that whilst I was the service provider, the relationship with clients had to be as close to 50:50 as possible, ie I and my staff were as important as the clients. So it really was a case of saying, "this is how we do business."

I too thought it would never work but we checked the ideas out first with a sample of clients then sent around a note to all clients about what we were planning about 6 weeks before D day (1 April) and, even though I too  had my doubts, people just went with it and for the 2-3 that struggled, they were not supposed to be clients anyway and we parted company.

By the way, I mentioned them above, but do you send out personalised tax return checklists and reminders on company info you'll need, again tailored to the client?  Making it as easy as possible for the client to put the stuff together is half the battle?

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By bigdave1971
02nd Feb 2015 17:18

I don't send out checklists having seen them not working in other practices I worked in and the amount of time it seemed to take to get them sent out. That said, if I am sending out this letter giving the stricter deadline(s) then it might look like I am making more of an effort to help them meet this new deadline if I enclose the checklists.

I am going to consider my options carefully and hopefully the changes will make January 2016 a bit easier ... I might actually get time to see my wife and kids in January!!

Thank you again for your help, there's no better advice than advice coming from someone who has been there and done it and figured out a way to do it better.

 

 

 

 

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Man of Kent
By Kent accountant
02nd Feb 2015 17:20

Look in the mirror

@bigdave - I wasn't suggesting you were one of the [***] all brigade.

But, if you're like me and busy most of the year, is the January rush just because you don't request the information soon enough?

I know part of it was down to me this January and clients got the information to me pretty quickly.

There are certainly 20-30 returns I could have done in August/September if I'd asked for the information earlier.

So I will be requesting information from certain clients a lot earlier, for others I'll accept that I'll get them done December/January time.

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By ireallyshouldknowthisbut
02nd Feb 2015 18:14

@Paul, how do you deal with the fact that a client drops stuff in your desk in May, but you dont actually do it until (say) November?

Are they not cheesed off?

I try to balance my clients (its about 60% ltd co in any case) so it come in through the year. I have some Jan client, but try to avoid getting any more.  I send reminders through the year, but not many, max 3.  But I stagger when they are sent.  So if a client usually sends stuff in early November (our deadline) I will get on their case probably once in the summer and seriously in September.   If they always get it in by August, they would go on the first wave of chases in early May. For the "over xmas" mob, they get a cursory reminder in September, and then a serious kick up the [***] in December.  And the Jan ones, I don't remind at all until probably early Jan on the basis they would just laugh at a May one. 

What I try to get is an even spread of work and about 2-3 weeks lead time max. 

All the ltd co's are spread through the year, with the main bunch being December and Jan (approx 30%) to fall into Feb/March/April which is my leanest period as there is no SA work other than "problems" ie late ones, investigations and the like. 

 

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Replying to chicken farmer:
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By Ken Howard
02nd Feb 2015 20:03

Managing client expectations

ireallyshouldknowthisbut wrote:

@Paul, how do you deal with the fact that a client drops stuff in your desk in May, but you dont actually do it until (say) November?

Are they not cheesed off?

Not unless they have a particular reason to want it done quickly.  I tend to prioritise those with July POAs in case we can reduce.  Then I prioritise those with expected repayments, then further down the list are the expected large tax bills and the ones at the bottom of the list are the ones who are unlikely to have a tax bill, such as as directors with optimum salary and dividends under £30k and low earning sole traders with incomes under £10k.  Anyone who expresses a preference to have it done quickly gets it done quickly.  Most people aren't that bothered.  It's a matter of managing client expectations - I try to ask the client if they want it done urgently - most say no, so that sets the scene for timescales.  If someone doesn't have a big tax bill, then they probably won't care whether the return is done in Summer or Winter.

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By adam.arca
02nd Feb 2015 19:48

My tuppence worth
I'd definitely recommend using checklists. I tried tailoring these but that required a significant time investment plus you can be sure you'll overlook asking for something which rather negates their usefulness.

But the advantage of checklists, even standardised ones, is that the onus is then on the client rather than you. Plus I find them a good way of communicating my detailed T&C. About a third or so of clients use the checklists but I'd still send them out even if no one did because my perception is that client compliance improved once I started using the checklists.

In terms of clients trying to "fool" the system by sending in partial records, you simply need a term that states something like a) records are only booked in when everything has been received, b) the accountant is the only arbiter of if and when the records are complete, and c) jobs aren't commenced with partial records only.

I'm also impressed that Paul has made the 3 month deadline work but I'm with
Ireallyshould in trying to spread things evenly and I do something similar. That said, it all went horribly wrong this year and I've had the worst Jan for many a year which goes to show that even the best-laid plans (not that mine were) only get you so far.

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Image is of a pin up style woman in a red dress with some of her skirt caught in the filing cabinet. She looks surprised.
By Monsoon
02nd Feb 2015 20:00

Early and regular chasing works.

For 2012-13, I was the most in the ball I'd ever been, and really chased people early. As a result we had a dead laid back and easy January. For 2013-14 people didn't get chased as quickly or often and we were much more hard pushed to get everything done. I'm going to be super on the ball for 2014-15. Definitely giving people deadlines helps, massively, plus regular chasers. My CRM makes me chase people after 2 weeks if I've not heard anything.

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By marks
03rd Feb 2015 01:16

what we do

We give sole traders/partnership which nearly all have 31 March/5 April year ends 

10% off fixed fee if everything handed in by 31 July

10% onto fixed fee if handed in Nov

25% onto fixed fee if handed in Dec

33% onto fixed fee if handed in Jan

We enclose this detail in the cover letter with the tax return checklist.  We applied the premium to all late clients this year and only one thought hit was excessive, he handed records in mid January.

We do the same deal with Ltd companies only the periods are 3 months after year end, 7 months, 8 months and 9 months respectively.

We will be contacting clients on a monthly basis this year by text/email (or sooner) to remind them their information is still outstanding if not yet in.

Also in the process of getting all Ltd company clients with year ends other than 31 Mar to change to 31 mar so ties in with tax year end and therefore ties in with payroll year end, personal tax return year end and P11d year end.  Means can easily do their personal tax return when doing year end accounts as accounts form basis of the tax year.  So far of the clients we have asked to change they have all changed.  Means we might have a busy December with stat accounts filing deadline due for March year end but aim is to get as many as possible done well before that.

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Teignmouth
By Paul Scholes
03rd Feb 2015 19:10

Client expectations

@ireallyshould....  we make it clear to clients that info is dealt with on a first come first served basis plus, with the use of checklists the info comes in pretty complete meaning we can turn around the average tax return or set of accounts quickly so we find it easy to spread the work and never get clients chasing us.

It also helps I suppose that the annual compliance side of the business has reduced over the years plus there are some clients who are just happy to know we have the info and so wouldn't care if we took 3-4 months to do the work, they will still know in good time what the tax bill is.

The situation has improved markedly since switching clients to Cloud Accounting where we can make sure, right up to the year end that the accounts are near perfect, leaving hardly any adjustment when we start work post year end.

Regarding checklists, this is where a system like Iris pays dividends.  We have always sent out their PDF versions for SA clients, which show the info entered on last year's return and inviting them to enter this year's numbers next to it (it would be a nightmare to do this manually).  Last year they released electronic checklists which create a version on Iris Openspace website for clients to fill in online.  Once they have completed them we can download the data directly into Iris Personal Tax.  In other words,unless there's new data to enter, which the clients can note separately online, the client is effectively doing their own return.

With company accounts we leave a manual checklist on a task in iris which repeats and prompts us each year and we can edit it when we have done the accounts for any changes for next year.  This is just copied into an email.

Whilst, for personal reasons, I struggled this year I really do not want to be doing annual compliance work over the winter months, I have quite a few quarterly accounts that need attention in January plus I'd rather be gathering up to date client info to plan for next year, both as regards tax and our workload.

 

 

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By TaxAngel
03rd Feb 2015 23:18

I would never trust clients to enter own data as Paul does- too often I get things that are incomplete/wrong tax year/transcription errors.  On subject of getting info in from clients I charge 20% extra for Dec receipts of papers and 40% for Jan receipt.  Some always pay that and are happy to do so.  Some pay one year and then courier papers to reach me by 30 Nov next year (at great expense).  Over the years I have found that many clients have their own approach to timing - papers always received about same time. Some are more erratic.  I put my efforts into the more erratic ones as nothing I do to chivy the others along seems to change the date I receive papers from year to year. Surprisingly many clients have the 'no longer on my desk' approach and don't seem to mind how long it takes to get the return and accounts back. I always send a checklist - some annotate it thoroughly, so a bit and others should be using it but don't.

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Jennifer Adams
By Jennifer Adams
10th Feb 2015 12:43

I hate to say this but...

... this question comes up every year as regular readers will know!

I too decided last year that enough was enough.

In my Spring Newsletter I told clients they would have to get their returns in early as I wasnt going to go through the hell of the previous year.

I emailed a reminder in September after their holidays.

I emailed again in early November setting a deadline of 5 Jan (yes.. I know... too late), sending paper reminders to those who have no idea what a computer is.

And after all this - this year was worse than last but just earlier. They spent Christmas doing their paperwork and gave to me in the first week of Jan. The usual defaulters ignored me.

I produced a schedule of who and when delivered and 2/3 waited until Nov/Dec.

Husband says its my own fault - I'm too kind - I should say 'tough - you're too late' . They do have 9 months to submit.

I am ashamed to admit that I also sometimes fall foul of the 'who moans loudest gets in front'

Perhaps incentives /bribes would work better - a friend of mine in practice tells clients that they go into a 'draw' for a large Fortnum and Mason hamper if they send in by a certain date. She says it works.

Paul says that the 'cloud' has helped - many of my clients wouldnt have a clue what that is let alone use it.

 

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RLI
By lionofludesch
10th Feb 2015 13:07

Agree with Kent

Personally, I like being busy when it's snowy and not so busy when it's sunny.

Funnily enough, it's the little jobs that come in at the last minute.  They tend to be less organized and leave it till the last minute.  I leave them to sweat a bit but, in reality, I always get them done.

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