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PRACTICE FEATURE: Practitioner's Diary - How was it for me?

1st Feb 2006
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Down in the West Country our general practitioner is still in one piece after a busy January.

* * *
31 January - We made it! Monday we still had 110 returns to file, but thankfully the FBI portal was reliable all the times we needed it. My report says we didn't file 22 returns out of 554. It also tells me that we filed 292 returns in January!

Of the late returns, some I think were submitted by hand by a team member who hasn't updated his client list, most are 'gone away' or no longer acting cases, and another four are late but have no tax liability so there will be no penalty. In net terms I think there may be just one or two real late cases. Not a bad result.

I even got my Return finished and filed yesterday.

Was it hard work again - yes! A couple of Sundays and some very late nights, but I was the last the leave tonight - at just 7pm - so all in all the well-oiled machinery worked as it should. I just need to get clients to do the same in 2006.

* * *
29 January - My last Sunday in the office for the rest of 2006, I hope. Tax Returns seem to be under control, about 110 still to submit(!!), but most of these are with clients and should be back with us tomorrow. A few laggards have instructions simply to phone or email to confirm that they have signed their return and we can then file them by FBI. We have adopted the practice of retaining the signed paper Returns on our files, although I understand some firms let clients keep them. I'd rather stay in control!

* * *
26 January - The weekend's drawing closer and the partners are manifesting the same psychoses as my clients. Like the client whose 31 January 2005 accoutns were done pretty promptly last year, we warned him about the rise in profits and the 2006 tax bill, and we followed up with a clear letter and computations setting out the amounts due with a reminder to budget for them; so he turns up this week claiming he wasn't expecting to pay any tax (any?!!) and he can't afford it. But he will let us have a file of expenses relating to the year that he didn't bother to give us this time last year. No explanation why he also didn't apparently pay any of them or reclaim the VAT ...! A prime candidate to go get a PAYE job asap!

Quite a few others have suddenly woken up to the fact that they haven't heeded our calls to come in and finalise their 2005 accounts so we can do their tax returns - but what's this, surely we didn't make all that profit (oh really, then how did you fund all those drawings?), there must be something wro9ng. I'll have to get back to you ...

Likewise, back at the office, partners are scurrying around between clients muttering things like "I don't think I claimed all my petrol last year", "I'm sure I have more expenses at home", "can I check you have all my mileage claims" and "let me have another look at my debtors list, I think I need to make some more write-offs". Plus, of course, "no, I definitely didn'y take that much in drawings last year!"

So having ignored the firm's finances for 20 months, partners are suddenly taking the keenest interest in every minute detail of the firm's accounts. I think every one has at least two photocopied sets of every bank statment to check, not to mention a full printout of everyone's drawings account.

This one's going down to the wire!

* * *
24 January - Just when I need to do less admin, the recruitment agency comes up with three secretarial candidates, so I had to spend the afternoon interviewing them. The first two have been made redundant ' one just interviewed me for over an hour, the other spent most of the time telling me her life story in some detail. Not quite what I'm looking for. Luckily the third has just moved back to the area following her husband's job move and seemed refreshingly normal in comparison AND she wasn't put off by my provincial salary level, so maybe the support team will be up to strength by the end of the month. Meanwhile I have a useful student keeping the show on the road so at least the filing is getting done even if the typing is a bit slow.

My new audit senior has come from a reasonable size firm where all the professional staff do their own typing. maybe that's something we should consider.

* * *
23 January - Feeling smug - I got 10 tax returns finished today. That's a good thing about partnerships, you get a whole block of returns done all at once. On second thoughts, that's probably the ONLY good thing about partnerships.

The partners here are still combing through the 2005 accounts with a fine tooth comb to see who's got more drawings and whose car costs most to run (and why has he got a newer mobile phone and noone told me his wife was getting a car on the firm, etc ...). Have resigned myself to having to file my tax return by hand just before dawn next Wednesday.

* * *
22 January - A typical January Sunday - in the office with a pile of files. My tax team are pretty relaxed still, their goal is to get the Returns out to clients - after that they reckon it's up to the clients to get them back to us. I'd rather focus on getting returns filed, but I see their point. Nonetheless, we'll be chasing paper this week. Noone gets a late filing penalty unless they actually want one - and I do have a few who would rather pay £100 than sort out their accounts.

Meanwhile, closer to home the firm's accounts seem to be nearing completion now all the hysteria has died down. We're now just arguing about drawings and motoring expenses - so I can foresee posting my Return through the tax office door early on 1st February again!

* * *
20 January - Why has the ICAEW sent me a package containing a silly little calendar in a plastic case? Have they still got money to burn after last year's merger fiasco? (Answer: yes, it's my money!) I've always had serious doubts about companies which send out calendars after the beginning of January anyway. If I want a calendar for 2006 I make sure I have it at the beginning of the year. Maybe they have decided to slip these out while members are too busy to complain about them - which is about right in my case.

* * *
17 January - ' Still no progress on the firm's accounts, so no nearer a final figure for the tax I need to pay at the end of the month. Senior partner has heeded his client's calls for some personal attention, has hit the road with a pile of files and is doing the rounds of farming clients to get their Tax Returns signed. Unfortunately, he also has the firm's accounts files in his car, so we can't make any progress in his absence!

* * *
16 January - Just checked the stats. Of 520 tax returns logged on our system, 195 have not yet been sent to clients for signature and 271 have yet to be filed with the Revenue! I find it hard to believe that we have 76 signed returns kicking round the office today, must check that one out in the morning. With 11 working days left in the month, so we need to file 25 returns per day! My team are still upbeat about making the deadline but I'd rather have got further ahead before Christmas.

* * *
13 January ' Hmm. Seems that a lot of the late Tax Returns are related to draft accounts piling up on my shelves. Have resolved to delegate all but the largest and most technical cases to my seniors, who are perfectly able ' some might say more able! ' to finish these off and get the Returns out of the door.

That's a huge weight off my mind ' and off the shelves.

* * *
11 January ' There seems to be an unwritten law that says that a client's interest in his accounts is directly proportionate to the estimated tax liability. So we seem to be spending more time that we would like this week explaining all manner of basic accounting entries to clients who, when faced with additional tax to pay, suddenly want an analysis of every item in drawings for this year AND last year, a detailed explanation of depreciation and capital allowances, and a lengthy exposition of the Government's tax strategy since Labour came to power. Without any extra charge, thank you very much. I wouldn't mind if I didn't have another 300 or so Tax Returns to finish. On second thought, I think I WOULD mind, but it wouldn't stress me out as much!

* * *
9 January ' The partners may not be talking, but my team are continuing to do a great job with the 2005 Tax Returns. And that's in spite of the support team being down to just one secretary/receptionist. December's not a great time for recruitment, and there seems little chance of finding another secretary for at least a month unless we're lucky. Three booked for interview on Friday.

Latest word is that senior partner has gone AWOL over the weekend, didn't appear in the office or make contact at all today. I'm getting a bad feeling about this.

* * *
6 January ' End of week. Outlook has just reminded me about the tax estimate. No chance! Senior partner and audit partner now not talking to each other except via senior partner's secretary. There has been a major falling out since they started to work out the uplift in WIP and the extra tax liability, even with the proposed spreading provisions.

Create new Task item in Outlook ' apply for re-mortgage next week in case I need the funds to pay tax bill on 31st.

* * *
5 January ' Tax estimate looking unlikely. Tax partner and senior partner locked in heated debate with audit partner over how we apply UITF 40. Senior partner only discovered this issue this week and is making heavy weather of it. Meanwhile his manager is tearing his hair out trying to keep his department afloat - senior partner's clients are screaming to speak to him about their own tax bills and he is stubbornly ignoring them.

* * *
4 January ' This is the time of year when accountants and clients are all in the same boat ' yes, we all want to know how much tax we have to pay at the end of the month. I still haven't got a clue. Despite delegating most of the firm's admin to the more junior partners, the senior partner retains the right of veto on the firm's accounts. In fact, for most of the year he just retains the accounts and all the rest of the books, so the rest of us haven't got the faintest idea what's going on!

Create new Task item in Outlook ' get tax estimate by the end of the week.

* * *
3 January ' A happy new year to all my readers! However, I suspect most of you, like me, are looking forward to a proper new year celebration, either after the end of the 2005 tax return season, on 1 February, or after the end of the tax year, on 6 April. I just can't get that excited about a holiday period that falls right in the middle of our busiest time of year!

There was good news and bad news when we looked at the tax return stats. Yes, we have sent over half out to clients for signing, but we still have over half to file with the Revenue, so a repeat of 2005 looks likely. Long days and weekends beckon'

* * *
Last month our West Country practitioner's tax return drudge was broken by some appropriate festivities. This month it's down to the final sprint to the finish line.

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Replies (13)

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By Andy Reeves
18th Jan 2006 17:18

Get organised
I said this last year, and I will say it again this time - the Practitioner is hopelessly disorganised and needs some decent practice management software. We use Iris, but there are plenty of others about or he could write his own spreadsheet version.

Yes, his firm seems bigger than ours - we only have 371 personal tax returns to do (plus a few partnerships), compared to his 520, but 331 of ours have been submitted to HMRC (mainly by ELS) and accepted. Of the remaining 40, 2 are awaiting HMRC confirmation, 10 are awaiting return from clients (and we chase if they are out for more than 30 days) and 2 are dead (so unlikely to reply, although we have chased the PRs!).

The rest are mainly late arrivals who must think it funny to send in their books in January every year (for which my fee will be similarly humourous), or they haven't bothered to reply to the numerous letters (eventually recorded delivery), phone calls, e-mails and texts - the latter works wonders with subcontractors. From June onwards a chaser of some form is sent at least once a month, becoming more frequent as Xmas approaches. After that, I don't bother as it is too late to do the job justice, but I do take on new clients in that time with a warning that they will have to let me have their papers in June/July next time. Perhaps if the fine was £1000 and not £100 (and not refunded if the tax was nil) then the late ones would get their fingers out.

There is no excuse for the Practitioner being so disorganised. Can he really devote sufficient time to reviewing the pile of draft accounts in the next 2 weeks? I doubt it, so he will have to cut corners. Let's hope his PII cover is good enough, as he might find the need to use it soon.

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By Neville Ford
03rd Feb 2006 11:13

I agree with Andy, Geoff & Helen
I'm afraid I'm with Andy Reeves on this one, and I think that Geoff Challinger & Helen Crowley have also made a valid point.

There is little excuse for completing (well, he did actually say filing) over half your returns in January, that is just disorganised. As a sole practitioner, whose client base is mainly small sole traders & partnerships with a few Ltd Cos, I had only 6 returns to complete in January. The vast majority were completed (& filed) before Xmas and the accounts for most of them were done between 9 months and 21 months ago, shortly after their accounting year end. An important step in achieving a peaceful January is breaking the link between accounts preparation and SA tax returns. The accounts relate to an accounting period and should be completed as soon as possible after the end of the accounting period. They should not be left until the return needs filing.

Geoff & Helen have identified an industry problem. There is a tradition, myth, call it what you will that accountants work incredibly long hours and that January is a nightmare. I think many are addicted to this and enjoy the masocistic buzz of January. I think they enjoy bragging about how hard long they work. It's not about how long you work it's about how efficiently you work. Admittedly I start work at 7.30-7.45 in the morning, have a complete break for 30-45 minutes for lunch and finish at between 5.00 & 5.30 and go home for my dinner. I have too many interests outside of work to spend all my time working. I very, very rarely work at weekends. But then again I just want a comfortable living, I am not empire building.

Remember, you're a long time dead! To quote my adolescent step-son "Get a life".

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By User deleted
28th Jan 2006 12:09

Feeling smug
Having spent the last 3 years getting my clients into shape, we have completed all our (300+) returns with 3 days to spare (except of course the usual half dozen who don't care).

As ever, we have had to resort to bullying, 100% surcharges etc, but still, off to Albion v Rotherham rather than sitting in the office!

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By aidan.sergent
25th Jan 2006 17:14

Secretarial support
Have now been in sole practice for 8 1/2 years and survived without any secretarial support having lived at the mercy of partner's PA's for the previous 15 years!
We now have a professional staff of six, and we all do our own typing and reporting.
The only time this gets really aggravating is when we are doing long reports, or Corporate Finance work, but can always get temp help for this if really pushed.
What the change did do, was make us all think really hard what needed to be said in correspondence. No five page letters now where one paragraph will do. We also maintain a range of standard letter templates, which takes a lot of the set up time out of the equation.

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By riches-watts
21st Jan 2006 09:44

Sympathy
No Practice Management available software can sort some clients! This year we have some clients whom have had endless reminders, becoming more and more frequent as the tax year passed. Reminders have included posted letters, emails, hand delivered letters, telephone calls, messages via spouses, messages via children. Kindly helpful tones, firm tones. All to no avail. We even increase our fees by 50% in December and Janaury for returns received after 30/11. Yet, still we have had records arriving this week.

The ICAEW were shocked in our PA review, at our fee uplift at this time of year, but as it's in the signed engagement letter, they agree that if the client accepts this, then why not get paid a premium for working 7 days a week in January!

Solution? Yes, bring forward the tax year end to 31/12 as they now have done in Ireland, and the tax return deadline to 30/11. But then what else would we do in January?

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Rebecca Benneyworth profile image
By Rebecca Benneyworth
19th Jan 2006 22:37

UITF 40 shouldn't be a problem
Unless your practice has adopted early, then the first possible period under UITF 40 is the year ended 30 June 2005 which is not taxable until 2005/06 - tax due in January 2007. Although the uplift to the previous year's WIP is how the "adjustment income" is calculated, it too is taxable in 2005/06, so you shouldn't have to worry about anything to do with that at present. Unless of course, you are seeking to reduce the payments on account for 2005/06, in which case you will need to take the UITF 40 tax (or at least a part of it - see the spreading provisions outlined in the PBR) into account. Not sure of your year end, but whatever it is this should not be holding you up any longer!

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By geoffemtacs
18th Jan 2006 18:53

Well it all depends
I have somewhat mmore sympathy for our practitioner, mainly because my boat bears a strong similarity to his (633 to do, 131 not done and 100 or so in transit, either outbound or inbound).

I think it depends hugely on your clientbase. Some clients are actually interested in their accounts because they are people who run a business. The figures mean something and are not a mindless piece of compliance that has to be gone through. But our clients (nearly all musicians and actors and the like) really find it very difficult to be interested and no systems of reminders, bill-spreading, phone-calls or whatever will convert someone from a January deliverer to a July. I'm sure systems of reminders are in place for our Practitioner as they are with us. They just aren't 100% effective.

Yes you can penalise them for delivery in December and January (and we do in a small way). But the fact is that dealing with a late-comer produces a very happy client who is infinitely more likely to recommend our services to his friends than someone we have seriously 'fined' for turning up late.

And perish the thought, I actually have come to enjoy January now. The buzz is infectious and as well as keeping the team focussed it keeps you busy in what is undoubtedly the drabbest month of the whole year. Or am I alone in having very deflated feelings in February when it's all over?


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By dennismiller
18th Jan 2006 16:22

how many working days?
Only 11 working days?

It must be nice to sit a home at the weekends and not worry about the number of returns still to complete!

I just have Saturday afternoons off to watch my local team, Ipswich Wanderers, then it's back to work for the other 6 1/2 days. I am also counting 1st Feb as an emergency tax return day, since there is still no fine! So that's 13 days in all for me, as of 18th!

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By John Savage
27th Jan 2006 08:50

Ahhh, Mr Practitioner....
the job 'ud be marvelous if it wasn't for clients!!!

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By Helen Crowley
17th Jan 2006 09:12

Logic?
If you have 195 still to be sent to clients and 271 still to lodge with HMRC then your missing 76 are probably either with your clients for signing or somewhere in the post rather than on someones desk! Unless of course you have fantastic clients who send back their signed returns the instant you send them out!
Will soon be 1st February so keep smiling (We are, although it's the inane grin of the mentally unstable)

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David Winch
By David Winch
17th Jan 2006 09:58

Just a thought . . .

The deadline for submission of returns is 31 January - which is 'sometime next year' until we get past Christmas.

Psychologically does this mean that too many people fail to direct their minds to what 'needs doing next year' until the festive season is over?

This is probably heresy (so I will say it quietly) - would it be better for accountants if a penalty were imposed for a tax return received after, say, 30 November rather than 31 January?

Might clients realise in that case that they had to think about their tax returns in September / October - resulting in less last-minute pandemonium?

Just a thought!

David

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By Helen Crowley
19th Jan 2006 09:12

Well said Geoff!
Agree it comes down to client base. We are extremely organised and contact clients at numerous times, in numerous ways, using carrots and sticks! It seems to be human nature to leave things until the last minute and for clients to think you won't notice the missing bits of information they couldn't find. I and my team also feel somewhat deflated the first week in February when the phones stop ringing and the pace of work slows from a 100m sprint to a crawl. Perhaps some of you are right maybe the deadline should be earlier and the fines more substantial.

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By AnonymousUser
20th Jan 2006 15:14

What's the Problem?
If the practitioner wants an easier January next year he first needs to identify whether the problem is one of workflow or actual capacity.
Question, do you have team members sat around during the rest of the year who at some point are light of work?
Answer no, then you have a capacity problem.
Answer yes, then it is a workflow problem.

The first step to solving any problem is to identify it!

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