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Six reasons to outsource company tax work

26th Jan 2024
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Initor Global UK provides premium outsourced services to UK accountants and businesses.

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If you are a UK accountant looking to improve the way you deliver company tax and VAT work, and achieve better profitability, you should consider outsourcing work to an offshore supplier. 

Outsourcing recurring work such as the preparation of monthly VAT returns and the associated bookkeeping, and the preparation of CT600 forms as part of the year-end accounts production process can deliver better outcomes for accountants and clients.

Here are six reasons why outsourcing company tax work makes sense.

Outsourcing services provides a better client experience

UK accountants often find it difficult to motivate clients to meet HMRC’s deadlines for filing company tax and VAT returns. By nature, clients will want to put off submitting information to HMRC which results in liabilities and will want to delay paying any tax due until the last possible moment.

From 1 April 2023, the government replaced the single rate of corporation tax with a range of rates based on the amount of profit reported. Engaging clients in the importance of managing their corporation tax position throughout the year can assist in smoothing the peak of work when tax calculations are needed. Accountants outsourcing accounts preparation and tax calculation processes find they have more time to spend with their clients discussing their company tax and cash flow, with the opportunity to upsell tax advisory services and other recurring work such as bookkeeping.

Following the introduction of making tax digital for VAT, all VAT registered businesses must submit information to HMRC using compatible software. An outsource partner can work with most accounting software to prepare returns and resolve any anomalies before submitting information to HMRC each quarter. With an outsourced solution, accountants have access to a team of tax specialists who will provide assurance company tax and VAT returns are prepared accurately and on time, and that experts are available to provide any other services commissioned, such as the preparation of sole trader accounts, cash flow forecasting, bookkeeping or amendments to previous tax submissions.

Outsourcing can reduce costs while ensuring the quality of services

The cost of outsourcing tax and accounting services is typically 50% less when compared to the equivalent services provided in-house. With an outsourced solution, there is no need to maintain an in-house team of tax accountants. When implementing an outsourced solution, accountants can improve internal systems and through the automation of tasks and more effective document management. With an outsourced partner focused on recurring tasks, the quality and accuracy of company tax and VAT returns is improved, with an increase in the quality of services to clients.

Clients can access more services

Using an outsourced solution allows accountants to scale and confidently offer more tax and advisory services to meet clients’ needs. It also creates the capacity to deliver growth in revenues and ensures clients have access to all of the services they need as their company tax situation changes. 

Reduced risk of service failure

Ensuring compliance with HMRC’s rules can be daunting, and penalties can be excessive if a deadline is missed, or incorrect information submitted to HMRC. Many accountants rely on a small team working tirelessly at the end of each quarter and at year-end peak periods to meet HMRC’s deadlines for filing tax information. Reliance on a small number of specialists presents a high risk of service failure should individuals leave a Practice at short notice, and if you cannot access a suitably qualified or experienced replacement in time. With an outsourced solution accountants have access to a team of experienced tax specialists who can provide the continuity of service needed.

Data Protection assured

Most outsource suppliers have experience of all major cloud-based bookkeeping, tax, and accounting software, which can be accessed from their own secure servers. They can also access your Practice server using secure remote login arrangements. Outsource partners can provide evidence they are GDPR and ISO 27001 compliant, and that client data is always secure and cannot be downloaded.

Removing recurring tasks helps develop people

The removal of deadline driven tasks from the day-to-day workload of accountants means they have more time to spend understanding the needs of clients and upselling services. Less time is spent on tasks such as contacting clients for missing information and progressing work, allowing individuals to focus on their continuing professional development and building the skills needed for their future careers

Conclusion

If you are looking to take your Practice to the next level and improve the quality of your tax work while reducing costs, you can arrange a free consultation with our expert team.

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