Anonymous
Share this content
43

The end is nigh......

Only my practice!

Didn't find your answer?

I am posting anonymously as I have not yet advised my clients about this.  I intend to do so shortly.

Although I am almost 69 I am still enjoying my extremely part-time / lifestyle micro-practice (even in these strange times!).  However, with MTD fot IT coming down the tracks in 2023 I have decided that the 2020/21 tax return cycle will be my last.

For the past 15 years or so I have not taken on any new clients (and shed a few awkward ones) in order to gradually reduce a previously full time practice to its current tiny size (approx 40 clients - average fee £400 - some more, some less).  I suppose the downside of acting out the last few years of my working life exactly the way I wanted is that I no longer have a saleable practice.  The remaining (mainly sole trading) clients are unlikely to be of interest to anyone else en bloc as (a) like me - they tend to be a bit long in the tooth with not many years trading left on the clock, and (b) there would be fee resistance as I am not VAT registered and probably don't charge enough anyway.

In any event I am not sure that I know enough about other practices in my area to be confident enough to accept responsibility for recommending one in particular.  Instead, I will leave clients to make their own choice as to who they go to.  As a consequence I will be faced with dealing with 40 professional clearances and requests for handover information over the next couple of years.  But that's OK.

Just wondering if others with micro-practices expect to be in a similar position and, if so, how they intend to proceed?

Replies (43)

Please login or register to join the discussion.

avatar
By Michael Davies
22nd Feb 2021 09:50

Yeah the onset of MTD finished me off,and I have been gradually down sizing my practice.As of today I only have my family members left.You know what,over 30 odd clients ditched and I have not received one Clearance letter by way of a response.I should also add that ever more onerous AML requirements and cost hasn’t helped either.

Thanks (1)
avatar
By Michael King
22nd Feb 2021 10:31

I recognise all of what you say. Now 78 and should have given up totally years ago, but the very small number of friends and family that I continue to look after (less than 10 and mainly Tax Return cases) led me to want to continue to do what I could for them, still get some enjoyment from doing so and keep my mind active. Alas, the MTD train coming down the track, together with the excessive cost of AML registration already here, has put an end to all of that. Time to move on to things more enjoyable.

Thanks (2)
By ireallyshouldknowthisbut
22nd Feb 2021 11:17

I am planning to do something similar, albeit not even 50 yet.

id not stress too much about the MTD malarkey. They will be lots of delays, get outs and lack of general compliance all round. The much simpler VAT side is not actively enforced and I think I am correct in saying not a single penalty has ever been issued for non-compliance with MtdfVat

Thanks (2)
Scooby
By gainsborough
22nd Feb 2021 11:35

Same here. I stopped taking on new clients a couple of years ago once MTD for income tax looked more likely.

I do wonder who I am going to pass clients on to though. Most small accountants (those that aren't running for the hills too) will have their hands full coping with existing clients.

Anyone else tempted to see Martin Lewis getting involved in battling against MTD or is it just me?

Thanks (3)
Hallerud at Easter
By DJKL
22nd Feb 2021 12:40

And now, the end is near
And so I face the final curtain
My friend, I'll say it clear
I'll state my case, of which I'm certain (A first time for everything, a non caveated statement)
I've lived a life that's full
I billed each and every client
And more, much more than this, I did it my way

Regrets, I've had a few
But then again, too few to mention
I did what I had to do
And saw it through, all those PPR exemptions
I planned each Chartered course
Each careful step along the CPD
And more, much more than this, I did it my way

Yes, there were times, I'm sure you knew
When I bit off more than I could chew
But through it all, when there was doubt
I came on here, and gave it a shout
I faced it all and I stood tall and did it my way

I've loved, I've laughed and cried
I've had my fill, my share of losses
And now, as tears subside
I find it all so amusing
To think I did all that
And may I say, not in a shy way
Oh, no, oh, no, not me, I did it my way

For what is a man, what has he got?
If not his Whillans, then he has naught
To say the things , to make an appeal
And brave the words and HMRC deals
The records show
I took the blows
And did it my way

Yes, it was my way

Thanks (16)
Replying to DJKL:
A Putey FACA
By Arthur Putey
22nd Feb 2021 14:50

I've had my fill, too many tossers ....

Thanks (0)
Replying to Arthur Putey:
RLI
By lionofludesch
23rd Feb 2021 20:50

Quote:

I've had my fill, too many tossers ....

All making HMRC policy.

Thanks (0)
avatar
By Jo Nokes
22nd Feb 2021 13:42

I’ve been thinking about this quite a lot lately. I can’t decide between it won’t happen because it’s too ridiculous, and it will happen and all will go well. If we assume that we cannot possibly take on the burden of the client’s digital record keeping (although I accept that some practices will see this a great fee earning possibility), then it will be the client who maintains the records, using some brilliant new piece of software. Now all that has to happen is that, using the new kit, the client simply presses a button, and the report is wizzed off to hmrc. End of problem for us, until the year end when we have to pull the filings together to make the 5th filing, with the rest of the savings and other income.

The fact that the quarterly filing may or may not be full of errors need not concern us, for sure it won’t concern Hmrc. There are few suitable products available at the moment, but I have to imagine that there will be a few more by April 2023. Am I missing something? Don’t get me wrong, I’m still waiting to hear what the good reason is for all these filings, but even though I am their accountant, I don’t think the burden will fall on us. Does that sound daft?

Thanks (1)
Replying to Jo Nokes:
avatar
By Wanderer
22nd Feb 2021 13:55

Quote:

I can’t decide between it won’t happen because it’s too ridiculous, and it will happen and all will go well.

You've missed what will actually happen in practice. It will happen and it will be ridiculous.
Thanks (4)
Replying to Wanderer:
By ireallyshouldknowthisbut
22nd Feb 2021 14:06

@wanderer Quite.

See also Brexit.

Thanks (2)
Replying to Jo Nokes:
Hallerud at Easter
By DJKL
22nd Feb 2021 14:07

Quote:

I’m still waiting to hear what the good reason is for all these filings, but even though I am their accountant, I don’t think the burden will fall on us. Does that sound daft?

I suspect the good reason is that others in Europe probably have this sort of thing and our lot want what they have.

Thanks (1)
avatar
By legerman
22nd Feb 2021 14:14

I can't help thinking MTD may not be the ogre we imagine. MTDfVAT has resulted in little change and for those it should be a doddle, as the work is pretty much done.

Others will have to ensure they are on top of their paperwork or pay to have it done. Treat it as if it was a VAT return, from my understanding HMRC will want to see, in effect, a PL sheet, not full accounts every quarter.

Thanks (0)
Replying to legerman:
avatar
By Southwestbeancounter
22nd Feb 2021 15:57

Why should clients who don't currently use accounting software be forced to use it?

I have very small clients i.e. taxi drivers and subbies etc whose books are fine and we work with them - if they went with anything like Xero, QuickBooks or Freeagent they would be a disaster, take us twice as long to unravel and then when we charge an increased fee the client would complain as some comedian on the TV said that their software not only prepared their accounts but also completed their SATR!

Thanks (1)
Replying to Southwestbeancounter:
avatar
By NewACA
23rd Feb 2021 11:54

As long as they are on at least Excel, they (or you for them) can just use bridging software - probably just once a year, so a quick upload on a website will be a 5 min extra thing as part of doing the tax return.

I'm sure that bridging software will come along in due course, I know one bridging supplier that is currently working on an excel bridging software package that should have a basic product up and running in a few months time. I am told you can either upload your own spreadsheet to their website, or use their own Excel template to populate.

I think the problem will be with the quarterly filings - but I think that will disappear. There is a very strong possibility this will go down to once a year I believe, once the House of Lords, Parliamentary Committees, sole traders and property rental landlords, not to mention the Daily Mail etc all start jumping up and down about doing 5 tax returns a year! I really don't see property rental landlords doing this 4 or 5 times a year, it just ain't gonna happen!

HMRC are going in high, but behind the scenes I expect know there will be major compromises in order to get some sort of digital thing up and running that in later years they can tweak, ultimately some years later hoping to get paid monthly like PAYE.

Thanks (0)
Replying to NewACA:
avatar
By Gone Sailing
23rd Feb 2021 15:48

I'm banking on spreadsheets and bridging, VAT has been fine.
It's the reverse charge for builders that has done my head in.

Thanks (1)
Replying to Southwestbeancounter:
avatar
By legerman
24th Feb 2021 08:35

Quote:

Why should clients who don't currently use accounting software be forced to use it?

I have very small clients i.e. taxi drivers and subbies etc whose books are fine and we work with them - if they went with anything like Xero, QuickBooks or Freeagent they would be a disaster, take us twice as long to unravel and then when we charge an increased fee the client would complain as some comedian on the TV said that their software not only prepared their accounts but also completed their SATR!

Quite simple - avoid cloud software! Spend £150+VAT a year on VT accounts, give them a copy of VT cashbooks, and t'jobs a good un. If bridging software is available for excel, then even better.

I have a taxi driver on my books, he puts everything on a weekly sheet, and I key it into VT. Instead of giving me that info twice a year, as he does now, he'll give me it quarterly. I'd spend no more than an hour tops on doing the extra bits, so it may cost him an extra hours bookkeeping a year.

I also have a few subbies. Again, I'll just need their records quarterly instead of annually. Very little extra time in my opinion.

Thanks (0)
Replying to legerman:
avatar
By Southwestbeancounter
25th Feb 2021 18:48

Maybe, but I think my issue is that realistically they want four payments on account that's all this is about unless they are also going the Big Brother route which is also feasible so why don't they just ask for quarterly payments and have done with it?

This business about going digital to eradicate errors is a load of tosh where agents are concerned or at least it jolly well should be - possibly it could be argued that more errors could be made by quadrupling the keying in of data but other than that the figures should be accurate either way.

Thanks (1)
A Putey FACA
By Arthur Putey
22nd Feb 2021 14:54

I've often wondered why accountants just retire and don't sell on their practices. There's even a broker for that. But it begs another question, if one simply retired could one be excused professioal clearance obligations. Give them their records back and drive off in your camper van into the sunset .....

Thanks (0)
Replying to Arthur Putey:
avatar
By John Stone
22nd Feb 2021 15:14

If you sell on, I assume you pass on files etc to the purchaser (subject to getting each client's permission relative to GDPR etc). If you don't sell on but simply down tools - then I would have thought you have a professional (and moral) duty to give clearance and full handover info (again subject to obtaining client's permission). Just 'driving off in a camper van' is not very professional and would be a very poor reward for perhaps many years business from the client.

Thanks (1)
Replying to John Stone:
A Putey FACA
By Arthur Putey
23rd Feb 2021 13:32

But if you just retire (rather than sell) you disengage and given them their records back. You have retired so are to all intents and purposes out oif the profession, so what clearance is there to give, what courtesy do you owe?

Thanks (0)
avatar
By Open all hours
22nd Feb 2021 15:43

How do you know its only your practice?

Thanks (1)
avatar
By adf2410
22nd Feb 2021 22:33

Wow - I'm in exactly the same position (except that I'm 42 and fed up with it all), and I'm thinking about all the same things as you are.

I made the decision halfway through the latest tax return cycle that I would be giving up this coming year, so as each client from September-ish onwards has paid for their 19/20 tax return, I've filed it, and then when I've sent them the HMRC acknowledgement and pdf copy of their tax return, I've let them know that it was the last time. Some have asked if I'll do another year, and I've said yes, but only if (I like them and) they're very early.

My timing of finishing is based on PII renewal date, software renewal date and longstop date is practising cert renewal date. If I have to pay for another one of those, I'll be very annoyed with myself!

I now need to let the early ones from last year know. I might do their returns for 20/21 and then tell them to go elsewhere, although as they're early birds, I might tell them early and give them the opportunity to find another accountant during the non-tax-return-months.

My biggest problems are two limited companies, for whom we do monthly bookkeeping, payroll, accounts, CT600. They both pay monthly. Practically how/when do I stop that arrangement? For the March year end - do I send the company elsewhere from April onwards for bookkeeping etc, and do the year end accounts while someone else is doing the monthly accounts?

I'm in the same situation too - I don't know any other firms, other than ones whose clients have moved to me, so I can't recommend where they should go.

I had in the back of my mind that I would chat to ICAEW for some pointers on how to finish gracefully. I haven't done that yet.

Sorry that I haven't offered any help, but just letting you know you're not alone.

Thanks (0)
Replying to adf2410:
avatar
By wilcoskip
23rd Feb 2021 15:33

Out of interest, what are your plans once you've shut up shop? You're a bit younger than I am, so I'm curious as to how you see things moving on from here.
Thanks.

Thanks (0)
avatar
By Andrew Coombs
23rd Feb 2021 11:14

If any of you would like a conversation about passing clients on to a reputable small practice I would be happy to speak with you. We are a small family run practice and the only difference between us and you is my father is retiring but I am taking over the practice in full. He will stay on board for a good few years yet and come and go as he pleases. Whilst I have the motivation and interest to expand the business. We are based in Somerset, South West if location-wise that is any use to some of you.
We also have a plan in place for MTD for income tax which shouldn’t cost the client any more than they are paying now.
For some like myself it is an opportunity and understandably for others it is a chance to get out.

Thanks (0)
Replying to Andrew Coombs:
avatar
By DMBAcc
23rd Feb 2021 11:24

Andrew how can we contact you?

Thanks (0)
Replying to DMBAcc:
Hallerud at Easter
By DJKL
23rd Feb 2021 13:49

You could PM him on here, clicking his user name will take you to a facility to send off board messages..

Thanks (0)
Replying to DMBAcc:
Hallerud at Easter
By DJKL
23rd Feb 2021 13:49

Duplicate

Thanks (0)
avatar
By girlofwight
23rd Feb 2021 11:18

On the matter of professional clearance, there is no reason why you couldn't produce the "pack" off your own back, and send it to client, ask them to forward to chosen new accountant.

Gives you a bit more control of the flow. Maybe still a one liner exchange with new accountant, but not all the attachments.

Thanks (1)
avatar
By DMBAcc
23rd Feb 2021 11:21

Yes in the same boat with about 60 micro businesses who happily keep spreadsheets and good manual records. Not sure what any of them would do. I had thought about getting them to contact their local MP but all 6 are tories in Cornwall so a fat lot of good that would do. I suspect many will just give up or simply trade under the radar. The Gov't will probably have more problems trying to feed the country than to worry about us. Huge food price inflation is on its way. It is all a rather sad end to a story where I was helping small businesses (like this Gov't keep trying to tell us they are doing) and at the same time earning a little extra on top of my pension. At least my wife will be pleased as she reckons I spend too much time for little reward. What with Brexit, Covid and now MTDfIT I wonder how any small trader can keep going. They certainly won't find an accountant as amenable as me or as cheap.

Thanks (1)
avatar
By M G Weemys
23rd Feb 2021 12:26

I totally understand as I am in same situation. I had anticipated the advent of MTD as being the beginning of the end (for me) a few years ago and it would be a forerunner of and therefore present future difficulties resulting from my intended retirement in, what was then intended to be, a few years (currently I'm 73).

I therefore made a conscious decision then, to stop acting for any of my clients with tax related activities (with the exception of a very few long-standing and trusted individuals who I did not wish to "let down"). Fortunately I had already established an acceptable (to me) level of clients to deal with residential flat management companies, or similar associations, for whom taxation matters are (usually) not an issue or are very straightforward.

It was with horror that I had read the proposals for a future need to prepare and feed financial info to HMRC and this would, most certainly, otherwise have been the final straw. AML hasn't helped either but the risks had been drastically reduced by choices already taken.

As other posters have said, I cannot believe that anything useful will be achieved by this proposed step as HMRC will do nothing with the info and the only potential benefit, or justification, would be to formulate cash-flow advantages to the Revenue. The costs to small business will inevitably be horrendous and I doubt that their external accountants will have the facility to deal with the ludicrously increased workload.

My existing clients have mostly been with me for several decades and are of a similar age. Consequently they are also ceasing themselves (voluntarily or naturally!) With a current level of ITR filing being only 5 returns, and having informed those clients that 2020/21 will be the last, my timetable is to pull up the drawbridge after September when those returns and all of my (company) December year-ends have been dealt with. This will also facilitate the coinciding of other factors (eg an active PI insurance renewal) and, importantly (!) the requirement to pay another year's exhorbitant (and mostly non-beneficial for me) fee to ICAEW in 2022.

I shall be sorry to call it a day, but the pointless bureaucracy, astounding inefficiency of HMRC, and everything else is all getting to be too much of an effort to deal with. I shall be happy to deal with the issue of any professional clearance letters in the knowledge that the nature of work to which they relate should (hopefully) not reveal too many skeletons in the cupboard - at least not tax-related!

Thanks (2)
A Putey FACA
By Arthur Putey
23rd Feb 2021 13:38

Fear not, for everyone wanting to get out of the game there is another wanting to get in. Perhaps our automated bookkeeping friend from the other thread will make an offer for the unwanted clients.

Seriously though, for those of us who aren't ready for retirement, but fancy a chnge, some ideas for alternative businesses would be welcome. Accountants aren't known for imagination.

Thanks (0)
Replying to Arthur Putey:
Hallerud at Easter
By DJKL
23rd Feb 2021 14:26

Well right now secondhand furniture warehouse springs to mind, I was looking on Gumtree the other day and the number of three piece suites free to a good (or not so good) home was startling, from Edinburgh alone I could have stocked a fair sized retail unit. Then again not much use if there is no retail.

I did have an idea years ago for a Soft Rock Cafe, effectively a chain of diners etc with rock memorabilia on walls etc but catering for those not old enough to frequent licensed premises, burgers, fries, juke boxes, pinball etc ,plus a range of soft drinks collected from around the world ( a lot of countries have their own popular drink, like Irn Bru up here, Sweden has Trocadero. etc)

https://en.wikipedia.org/wiki/Trocadero_%28drink%29

Catch would be policing them for unwanted substances.

I suspect it has now been done by someone else but we did come up with the idea in the early 90s.

Other ideas over the years were secondhand book warehouses ( Anyone who has visited Fjaerland Norway or Wigtown, Scotland, will get the idea), forget lots of different charity shops, get some old library bookcases, sort the stock and place on the appropriate shelves, have car parking outside and a cafe with a play area- something like 5,000 sq ft of warehouse would work, then do deals to collect stock from all the school/church fairs, bulk buy what is left at the end of their event for next to nothing (Came to me as I was loading all the unsold books after my kid's primary summer sale years ago, there was enough to fill the back of a Mercedes 300 estate with the seats down, all went to book recycling)

Catch with this one is I suspect it has been overtaken by Amazon, Abe etc.

My last cunning plan was to get a mobile sawmill unit and drop trees, roll the trunks and plank the timber in the forest, something like this LT 35:

https://video.search.yahoo.com/search/video?fr=mcafee&ei=UTF-8&p=woodmiz...

And that gets us to Monty Python.

Thanks (0)
Replying to DJKL:
A Putey FACA
By Arthur Putey
23rd Feb 2021 15:12

Is the Lumberjack Song still allowed?

Thanks (0)
avatar
By KH
23rd Feb 2021 14:30

Yep, me, too ... I turned 73 a couple of weeks ago, have a turnover of about £25k (which takes up about one day a week on average throughout the year), and have a very easy life down here in Somerset ... but this year has really gotten to me, so I am giving it all up this summer. Yes!

Thanks (0)
avatar
By KH
23rd Feb 2021 14:30

duplicate

Thanks (0)
avatar
By Gone Sailing
23rd Feb 2021 15:55

I receive a relentless stream of emails from brokers on a daily basis, without invitation.

They know where the wind is blowing, and so do I.

Thanks (0)
avatar
By Shortyhome
23rd Feb 2021 17:23

I have a small practice that I am building up near Heathrow. If you are thinking of retiring and you are happy to pass on your clients to another company, I would be happy to offer a generous commission on everyone that goes on to become a paying customer and take the strain of doing the work. The majority of my clients are sole traders and the website is www.shortandsons.co.uk.

Thanks (0)
avatar
By Gone Sailing
23rd Feb 2021 18:03

Does geography and locality have much significance these days?

It's better that your clients move to a specialist in their trade / profession.

Websearch accountants who specialise, contact them and possibly request references.

This may mean sending your diverse client base to different accountants, but a better outcome all round.

Thanks (0)
RLI
By lionofludesch
23rd Feb 2021 20:48

I've been downsizing for 5 years. I just told the rest to go elsewhere. I made a suggestion - up to them whether they take it or not.

Thanks (0)
avatar
By CardiffAccountant
25th Feb 2021 17:13

MTD for Income Tax will happen.

Other countries require quarterly tax returns - why shouldn't the UK.

A lot was said about RTI not being workable.

A lot was said about MTD for VAT not being workable.

Both are working (not perfectly, I agree), but they are working.

MTD for Income Tax will happen, and I for one will make the most of any opportunities that arise.

Thanks (0)
Replying to CardiffAccountant:
avatar
By Hugo Fair
25th Feb 2021 17:29

It's not a matter of 'workable' but of a massive increase in effort - and, most importantly (particularly for clients), of frequency of processing.

RTI was a massive pain (I should know as the acknowledged first submitter with HMRC watching with crossed fingers), but at least the frequency of submissions was tied to the frequency of paying employees - so no fundamental change to frequency of data collection and processing.

And the same goes for MTD for VAT.

Whereas MTD for IT multiplies the frequency of processing (massively so if you happen to have different types of income stream or ones that are shared with others) ... and is built on the insistence that everyone collects all their data in real-time (which is what HMRC are really chasing).

Whether or not you think this is a worthwhile objective (morally or from a tax collector perspective or simply as an opportunity to increase your fees), it is a wholesale interference in the day-to-day life of SMEs ... many of whom will either close or go below the radar.

Thanks (2)
avatar
By loverboyfullofjoy
26th Feb 2021 10:41

I would be interested to know what area of the country you're in, as I may be interested on taking some more clients on.

Thanks (0)
avatar
By loverboyfullofjoy
26th Feb 2021 10:41

I would be interested to know what area of the country you're in, as I may be interested on taking some more clients on.

Thanks (0)
Share this content