On Tuesday I saw something truly amazing at The National Tax Conference in Birmingham.
A show of hands indicated that out of the 500 people present, only 6 were actively advising their clients on Tax Credits. So over 98% of accountants are ignoring it
This amazed me for three main reasons:
ONE: In some cases tax planning advice given without regard to Tax Credits is actually 100% wrong once the Tax Credit implications are factored in.
TWO: A family with three children can be entitled to over £11,000 in Tax Credits a year. And given that Tax Credits are even payable to families earning over £50,000 a year, the amounts at stake for clients, and the number of clients affected, can be very substantial. So by not helping them in this area we are really letting clients down.
THREE: In contrast, the handful of firms who said they were being proactive with Tax Credit compliance and planning reported some extraordinary results – eg per client fees of £395 + 10% of the extra Tax Credits identified not being uncommon. Once practice new to the area said it has already earned over £10,000 from the first 40 clients it has proactively talked to about Tax Credits.
So by not being proactive in this area , 98% of accountants are letting their clients down, and also letting themselves down by earning less than could.
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