Get set for self assessment seasonby
Education, processes and chasing clients earlier are just some of the areas practitioners have refined in preparation for self assessment season. Richard Hattersley rounds up some of the lessons shared in a recent episode of Any Answers Live.
Self assessment season is just around the corner and many accountants and bookkeepers are already hunkering down in preparation for the long working days and increased workload in January.
Bilal Ahmed, the chief accountant at Heath Hill Green Ltd, and Penelope Allard, the founder of Wild Bookkeeping Ltd, joined Any Answers Live last week, in association with FreeAgent, to share their strategies ahead of self assessment season.
Both are currently on track to comfortably meet the deadline. Ahmed and his team expect to be done with tax returns by 19 January, while Allard has circled 14 December as her internal deadline.
The accountant and bookkeeper are ahead of the game this year after starting their 2022/23 self assessment campaign shortly after the 31 January deadline earlier this year. Both confessed to working on 31 January to wave through the last stragglers, with Ahmed finally getting a signature from a tardy client half an hour before the bell tolled on busy season.
Education, education, education
Ahmed started the year with regular webinars educating clients on everything to do in order to get ready. Then throughout the year, he has provided subtle nudges to ensure they’re on track.
“We talked about forward planning with clients and the importance of getting to know your number early, and the benefits of that,” he said, using the example of if a client was looking to buy a house and wanted to move quickly or to take advantage of early payment interest. He also rallied his clients with similar messages on social media.
In parallel to dangling the carrot to clients, he has not been afraid to brandish the stick either. Ahmed has been very selective on accepting new clients and has spent time to “rationalise” their client base, too.
“Staff welfare is massively important to me. While we reserve the right to charge a late payment penalty, we haven’t ever done that. We do reserve the right and whether we’ll exercise it is a completely different thing.”
Allard also emphasised the importance of client education in her self assessment campaign so far. For example, a prospect who recently approached her for bookkeeping support thought they could submit their tax return only in January.
“There’s a massive education needed with some people if they perhaps think that if they do their tax return in April or May, they’ve got to pay it then. And so I think it’s getting it across that if you do your tax return early, you can still pay in January,” said Allard.
Navigating HMRC and the Covid ripple effect
Starting early and having a strategy was necessary, considering the squeeze that practitioners have endured. As many look towards January, they have already felt the effect of the closure of the HMRC helplines during the summer – which made it difficult for accountants and bookkeepers to get support – to the profession still feeling the ripple effect from the Covid lockdowns.
Emily Coltman, the chief accountant at FreeAgent, said on the show: “We are still seeing the effects of clients having to either close or modify their business for a whole 18 months.”
However, the practitioners have taken the closed helplines during the summer in their stride. “Just trying to get through to HMRC at any time is almost impossible, isn’t it?” quipped Allard. She circumvents the long wait times by calling the HMRC hotline at 8am before many others have clocked on for the day and by banking up her queries rather than making individual calls.
Ahmed, meanwhile, has a “super niche” client base of dentists. “So the same problems tend to rear their heads every year,” he said. This means they are able to pick up those repetitive queries. But despite automating part of the process, calls to HMRC are unavoidable. They just don’t call HMRC after midday, otherwise they’ll lose the day.
What they did differently
As part of their drive to continuously improve their self assessment processes, both Any Answers Live panellists this year focused on improving their technology, systems and workflows.
Ahmed started his self assessment planning from 1 February. Using his background in standardisation and automation in large corporate entities, he looked for replicable and repeatable processes and found ways to ring-fence them. This enabled the firm to provide proactive guidance to clients early in their self assessment campaign.
This started with eight webinars between February and March, covering the benefits of getting your tax return done early. So he had trained dentist clients to keep their numbers up to date in their software. He was then able to have conversations with them about how much liquidity they had to play with, or whether they wanted to take advantage of SEIS investments or if they wanted to make a lump sum pension contribution.
“We asked for basic hygiene the same way the dentist wants me to brush my teeth twice a day and come to see them every six months. I want you to treat your finances the same way,” he said.
Allard, too, has also improved her processes. Her practice management software sends an automated email to clients on the 6 April to kick off the new tax year. This reminds clients about the key deadlines and some potential tax savings.
Alongside the email, Allard sends a detailed questionnaire about their tax affairs, and she sends an auto-chase on that to ensure she has the required information before the firm’s internal deadline. These gentle prods ensure she’s not rushing and chasing clients in January for this information.
“When you’re rushing, that’s when you make mistakes, that’s when you miss things. Whereas if you give yourself enough time then you can sit down and look at the [tax return information] calmly and quietly,” said Allard.
Despite these prompts and nudges, there will always be some clients who fall through the cracks. One of the most common responses to this is to clear out the dead wood. Ahmed, however, was reluctant to tar all late clients as being uncooperative and ready for the sacking list come February.
He said that sometimes with these clients there is an underlying reason for their lateness. “We don’t want to go in heavy, especially if they’ve suffered a bereavement,” he said.
“We charge a premium price for a premium service, and part of that is making sure we’re available to be flexible around what’s happening with the clients. So sometimes, people bury their heads in the sand, while for others it’s a confidence thing where they’re embarrassed by not having done it. So how can we open our arms and welcome them in as opposed to making it more stressful for them?”
However, he will show the yellow card to repeat offenders and have a frank conversation. Allard also takes a hard line on internal deadlines. The key dates are included in her engagement letter and if the client hasn’t provided the information by the end of October, it means they can’t guarantee the return will be filed by 31 January.
Both practitioners highlighted the importance of having well-trained clients meet deadlines due to the knock-on effect it would have on their team in January.
For this reason, Ahmed has switched off the new business link on his website: “We prioritise our existing client base, because there will be things that come out of the woodwork that we have to remain flexible for.”
But long working hours in January are almost unavoidable. Ahmed wants his team to be incentivised to burn the midnight oil so he’s turned self assessment season into bonus season. The bonus structure is tethered to submission deadlines, and any fine diminishes the bonus pot. Bonuses are then all paid out at the end of January.
Then come February, both Allard and Ahmed said they will organise team days to celebrate the end of January.
“If you treat people like people then funnily enough, they do good work,” said Ahmed.
As the episode of Any Answers Live came to a close, the overarching message that struck each panellist was the importance of organisation and planning in a successful self assessment season.
FreeAgent’s Coltman referenced Abraham Lincoln’s “Give me six hours to chop down a tree and I will spend the first four sharpening the axe” quote to emphasise the point that “you don’t want to be chasing your tail trying to get organised when clients are bringing their tax returns in.”
Echoing this, Ahmed said: “The best-laid plans of mice and men – we can plan but we’re dealing with sentient variables. So we’ve remained flexible enough to accommodate them when things go wrong.”
You can catch up with this special self assessment episode of Any Answers Live now on demand. The episode, sponsored by FreeAgent, also covered basis period reform, January burnout and much more.