Practice Editor AccountingWEB
Share this content

SA season: Is the January rush a myth?

4th Jan 2018
Practice Editor AccountingWEB
Share this content
Busy Oxford street
istock_oversnap

January has always been greeted with widespread trepidation. Practitioners steady themselves for long hours churning out tax returns and chasing otherwise AWOL clients. But a shift in how practitioners approach January has happened.

A vocal segment has played down the so-called January rush. No longer are these accountants brandishing January war wounds. This begs the question: is the January rush just hyperbole?

AccountingWEB regular Kent Accountant led the charge when he said the “tax return season hysteria is completely blown out of all proportion”. He added: “I've said before the amount of work my practice does in December and January is little different from the rest of the year.”

Blown out of proportion

Although, Kent Accountant admitted that his somewhat unchanged January is the result of having few sole traders. Even so, he ascribed his stable January to completing work on a steady basis throughout the year and that way he avoids “serious backlogs of work”.

This theory was backed by a number of proactive practitioners sharing their self assessments stats at the beginning of December.

Hancox and Co, for instance, had already sewed-up 72% of tax returns with 12% in progress and is waiting on 16% to come in. Trish Baillie was in a similar position, with 222 filed, 27 out for signature and only 39 not started. And again, mfbrown took a sizeable chunk out of their returns, with 136 filed, 22 out for signature and 42 left to do.  

People accept the January rush

For AccountingWEB contributor Glenn Martin, avoiding a hectic January is all down to mindset. One school of thought, he explained, accepts January will busy, just like every year.

“[Practitioners] leave all returns until January then blitz them through the month and accept that is just how it is,” Martin said. “I did that one year and it’s not for me. I wanted to change so that work was more constant through the year.”

Instead, Martin is working towards a stress-free January thanks to shifting the majority of his tax returns earlier in the year. He argues that with cloud software firms should have moved away from this traditional way of approaching January. “I think modern firms think the January crazy season is a bad thing so they try and keep away from it.”

Rather than toiling away the hours on tax returns, Martin is using January to work on his practice. “There are opportunities by not falling into the tax return black hole.”

“This year, by not been busy with tax returns,” he said, “it has allowed me to meet some good new prospects whereas I imagine a lot of firms stop all marketing from November to end of January and don’t even consider meeting new clients.” 

Easier said than done

That all said the AccountingWEB members' self assessment stats were far from conclusive. Despite EssexFCCA dusting off 190 returns from their pile they were still waiting on 180. For them, the changes in tax on dividends meant more clients fell into self assessment than before.  

And for Joe Alderson, the January rush is unavoidable. Even though the majority are done before December, their high volume of clients almost guarantees a delay: “I find the major problem for us isn't getting the clients signatures, but getting them to confirm their other sources income and finalising their company accounts.”

While many practices feel like they’re on course to SA completion, every year there is always the same recurring snag. As Small Change interviewee Darren Stone said: “It is always the last 30/40 that is the stubborn ones to get cleared because they are the clients that don't have the information readily available.”

January clients

Jo Tomlinson, the managing director of QuickBooks Firm of the Future winner Business Works, debunks the January rush is a myth theory. “Lots of people because they're so busy leave things until the last minute,” she said. “Regardless of how many times you ask them to give you the information they'll go 'it'll be alright because we know the deadline is 31 Jan'.”

Tomlinson starts weekly planning and forecast meetings from January. The idea is to capture how many tax returns everybody in the team has left and from here the firm creates a workflow to battle the outstanding clients.

But can this be avoided? While the firm can plan, organise and nag clients as much as they can, there will always be someone who suddenly realises over Christmas dinner their SA responsibility.

“They put it in the ‘too hard to do’ drawer,” Tomlinson said. “It's not necessary even that hard. But they don't want to do it so they will delay it as long as they possibly can.”

Can't escape latecomers

Even Martin can’t escape the latecomers. “In an ideal world I would be finished tax returns by end of October but I still have a few diehards who leave it late.”

But at this stage of the year, Martin added, it could be worse: “There are a few old school firms near me who are not even half way through their returns and have 100s to do in January. That would be my idea of hell.”

Is the January still dreaded in your firm? What position are you looking like as we enter the New Year? How bad are you forecasting your January?

Replies (39)

Please login or register to join the discussion.

avatar
By Vaughan Blake1
04th Jan 2018 16:45

As a battle scarred veteran of every SA year since it started, it has got easier. The first few years were absolutely horrendous. I think the shortening of the Companies House filing deadline has actually helped by taking some pressure off in January (on the basis that 31 March is the most popular company year end).

For me the key date is 30 September. If you are up to date at this point in the year, January is going to be easier. By "up to date" I mean no backlog of unstarted cases, all clients written to once and reminded at least once.

Looking back pre SA we used to get all the tax returns in by 31 October so that the onus was on HMIT to raise the assessments. Admittedly many entries were, "per P60, per P11d, per accounts". Makes me think with MTD those days will in effect return. Will the 31 October be the new 31 January, I wonder.

Thanks (1)
Jennifer Adams
By Jennifer Adams
04th Jan 2018 19:21

Yes well ... bully for you! In the past I've tried everything to get my lot to give me their stuff earlier - this year I finally threatened sanctions if not in by Sept (financial penalties - ie pay me or the taxman = your choice).
As it happens some did take notice and this year seems less stressful. But there are always the usual diehards.
What I'm finding now are those who have suddenly decided that their mortgages are coming to an end in like 2 days time and want their accounts done in advance of others.
Not fair.
I always send an email round about now to those clients whose accounts are in but I still have to do saying that if I've acknowledged receipt then they are on my list but I'm working strictly in order of receipt.
I'll tell them not to nag me by emailing/texting/ringing chasing their figures - I'll get it done in time - I always do.

Thanks (2)
Replying to Jennifer Adams:
wolfy
By rob winder
07th Jan 2018 09:00

Three days into January and I have about 35 hours of SA left to complete the lot. For years now I have pushed to get as much done as I can between October - December. As you say though, there are the same diehards every year that will wait until the last minute and I can guarantee I will be pushing the button on my last one on the 31st.

Like you I am finding more clients wanting to jump the queue because of mortgages and loans etc. Historically I have always tried to accommodate these clients as one of our selling points is the service we offer and our speed to respond. However, time and time again it tends to be the same culprits that expect you to drop everything for them so this year I will continue fast tracking their work but I will charge them an additional fee for every hour worked. I suspect their work will not be so urgent when this is the case.

Thanks (0)
avatar
By Accounts12
04th Jan 2018 20:58

No it is not a myth but so much of how your January is depends on your client mix, how many staff you have helping you, how many clients you have etc. I have a lot of sole traders and we do tax returns all year round but January is still a nightmare, plus we have more directors returns as well this year to complete. This week alone has been crazy, it's my busiest quarter end for VAT returns and even though I've managed to put off most year end account work till next month, my emails have been going crazy, I've got new client enquiries to squeeze in and I am on my third night in a row working until 11-30pm but we will get them all done as we always have so all I can say, as I do every year, is bring on February!

Thanks (1)
avatar
By AnnAccountant
04th Jan 2018 22:47

I'm a tax adviser. Don't do loads of returns so they aren't an issue.

But I get plenty of queries from accountant clients who are doing returns. Range from 5 mins to answer to a few hours. That's on top of everything else.

My work is very much driven by other people's work in that respect.

Thanks (0)
Replying to AnnAccountant:
avatar
By cathygrimmer
05th Jan 2018 10:45

Me too! But I find the first two weeks of February are usually really busy as my clients pick up the non-tax return work that they haven't had time to do because they've been concentrating on tax returns and which have now sat around so long they've become urgent. I'm guessing it's the same for you.

Thanks (0)
Replying to AnnAccountant:
By coops456
05th Jan 2018 13:43

ditto for us as a payroll bureau. Only takes 5 min but they do add up.

Thanks (0)
avatar
By NH
05th Jan 2018 10:07

Its not even the whole month of January that is a head long rush, it is more like the last 2 weeks.

The first week nobody wants to know, 2nd week they start to think about it, and then we see a mad rush from week 3 onwards.

Since the shortening of the Co House deadline we now get a busy December which very slightly alleviates the January workload.

I have tried for over 15 years to get clients to change but whatever we do, carrot or stick, it is always the same old ones.

Thanks (1)
Replying to NH:
avatar
By bigmuggsy
05th Jan 2018 11:42

Your response absolutely sums up our practice also!

Thanks (1)
Replying to NH:
avatar
By Pam Moreland
05th Jan 2018 15:47

That is my response as well. It is now 5th January and I have pretty much done all the ones who bothered to send the information in before Christmas. Now on to the ones who, in spite of numerous reminders, have yet to cough up the information.
I have been doing this since self assessment came in and clients have got later and later. You are caught between a rock and a hard place. If you perpetually nag and keep chasing you get the response 'I'm not stupid, I know what the deadline is' and if you do not, you get ' why did you not remind me'. I have tried early filing discounts and higher fees for January cases and nothing makes any difference at all. The same ones are early ad the same ones late. It is uncanny that, when you review the dates they send in the information, it is virtually the same every year.
I am afraid human nature being what it is, as well as the immediate culture we live in means that everyone leaves everything to the last minute. People don't change.

Thanks (0)
Replying to Pam Moreland:
avatar
By NH
05th Jan 2018 16:10

Yes I have always found that one very interesting, quite often we will complete work for the same client within a day or two every single year.

Thanks (0)
avatar
By KH
05th Jan 2018 10:08

Having a lot of work in January is not only the norm, due to most people putting the work they don't like doing on the back burner (talking clients here, not practitioners ... although I'm sure we also do that), but also a blessed relief ... it frees up the summer months of the year to soak up the sun and sit in the garden ... great way to live life, if you ask me. Certainly I wouldn't want to be basking in the garden today...............

Thanks (1)
avatar
By raybackler
05th Jan 2018 10:14

I agree with Kent Accountant. There is no need for the January rush, with the right type of clients, the right software in place and working with clients during the year. The problem is always sole traders and those limited company clients where there is additional income, usually a buy to let. Last year, I cut out a number of sole traders and reduced my returns down to 64 this year. As I write 56 are filed.

Thanks (0)
Replying to raybackler:
avatar
By Mr_awol
05th Jan 2018 10:42

raybackler wrote:

I agree with Kent Accountant. There is no need for the January rush, with the right type of clients, the right software in place and working with clients during the year. The problem is always sole traders and those limited company clients where there is additional income, usually a buy to let. Last year, I cut out a number of sole traders and reduced my returns down to 64 this year. As I write 56 are filed.

I'm not saying it is only 'smaller' accountants who believe the January rush is a myth, but your comment about having done 56 out of 64 isn't unusual for these types of thread.

If we look at it in percentage terms, then your eight would equate to about 50 for me. I've got double that, at around a hundred to go, which is approximately a third of my Returns. I'm feeling the January rush a fair bit. Then again, we close the office over Christmas and new year so we don't get that much done in December.

I reckon if it was just me and one other (to help with payroll and odd bits here and there) we could probably knock out a good £120k pa easy enough and not have much of a January rush. I suspect it is in the small/medium firms with a few partners and a dozen or so staff (especially when the staff are pooled) that starts to become much more difficult.

Fully embracing the cloud could help of course, as you don't have to rely on the client bringing the books in. Getting them on Standing Orders also helps, as they don't hang it out to avoid your invoice.

Thanks (0)
avatar
By BrendanJ
05th Jan 2018 10:23

As a software vendor (AKA one of those pesky people that phone you up trying to book a demo) I've found a lot of accountants willing to speak with me in January last year and this year compared to previous years.

It's good to see a lot of the seasonal stress start to dissipate as technology takes some of the leg work away from manual tasks!

Thanks (0)
avatar
By Lesser Tax
05th Jan 2018 10:44

It's not a myth anymore than a group of school children has the kid who does their homework as soon as they get home from school and the one who hands it in late because they forgot, had football practice, dog ate their homework or it was their uncle's birthday.

Client selection, process, staff can all influence this but ultimately human nature does dictate organised folk versus lastminute.com.

Doing lots of smaller jobs is also more tiresome than fewer and larger jobs and profitability depends on a host of factors.

The auto population of certain digital information helps and technology is the way forward in this respect. HMRC need to be sharing everything they have and gradually one can only hope the unhelpfulness, bureaucracy and block on direct access for accountants on certain types of info will be completely eroded.

The debate from HMRC needs to move from compliance to advisory and they can force the compliance to be correct with more auto population and information sharing.

All I can see with MTD is more filtering on client selection.

Thanks (0)
By Glenn Martin
05th Jan 2018 10:56

Technology is a good point now that BTC and Taxcalc can access to HMRC API's it should sort a lot of issues for last minute stragglers.

I have a few people with pensions and they are terrible to get P60's from but not now you can cut them out of the loop.

I Imagine that all software will have this soon and if you could be bothered to work it out would represent a massive time saving over the full year.

I mainly look after companies and have less than 10 sole traders so not a tax heavy practice, but for me the biggest thing to de-stress your tax season will be new tax software with API's.

One good thing about January is that it stops AWEB posting about MTD and Brexit.

Thanks (1)
avatar
By mabzden
05th Jan 2018 11:01

January is less busy for me nowadays for a few reasons. Probably the biggest is the 31st December deadline (as mentioned a couple of times above) for 31st March year ends.

I would also agree with the post above to say that better software definitely helps. These systems (especially those available online) have improved over the last few years, making it easier to get data from, and documents back to, the client.

This year I've also been able to access and download PAYE data from HMRC's system via the APIs, and my main tax software has started auto-filing tax returns for me once approved by the client.

These small time-saving measures add up and reduce the time spent on each client or tax return. If you reduce the time per tax return by, say, 10% this is enough to reduce the stress to manageable levels and avoid burning the midnight oil.

Thanks (0)
Replying to Glennzy:
By Marion Hayes
05th Jan 2018 12:31

My software doesn't access Pensions so no help there!!!

Thanks (0)
avatar
By codling
05th Jan 2018 11:01

Sorry, too busy to comment right now - will do so in February!

Thanks (1)
avatar
By JohnB
05th Jan 2018 11:57

A tiny bit of analysis on the 3 firms who have shared their statistics:

We have 10 months to submit the returns (April through to January) so January represents 10% of the available time.

Hancox have 28% of their returns to do in that time, Trish Baillie has 14% and MF Brown 21%.

They don't seem that different from the rest of us!

Thanks (0)
By Husbandofstinky
05th Jan 2018 12:09

Same old routine year in year out. Same lot bringing it in this time every year. The same lot saying I'll bring it in earlier next year.... Joe Public and you can't get away from it.

Of course you can ditch them and loose a bit of decent fee income. You could of course switch to companies and ditch sole traders/partnerships.

Being doing this since SA started and yes you try a different approach (carrot/stick) but the end result is the same.

I accept it and look at it positively thinking of all the months to do this, January has got the be the best. A 31 July deadline anyone?

Moan about it? Nope. It pays the bills.

Thanks (1)
avatar
By Ian McTernan CTA
05th Jan 2018 12:35

I like the concentration of SA work in late December through to the end of January. It means I can take days off during the week during the rest of the year to play golf- whereas January isn't really my idea of golf playing weather!

I like working through Xmas and New Year, it's a great time to work as it's nice and quiet, and gets a head start on the January rush.

I'll work every day in January, do loads of bills and plump up the bank balance in time for a nice long holiday in February and March, and then it's almost warm enough for golf!

I have a lot of self employed clients, especially landlords, who will always leave it until now to get their act together and no amount of offering penalties or discounts gets them to move any faster. So they leave it until January, but they pay for it with the fat fees I charge them- it's my most profitable work:-)

Thanks (1)
Teignmouth
By Paul Scholes
05th Jan 2018 13:04

Many practitioners contribute to the last minute stress by giving clients far too much time to send in their stuff. For many years we told clients that if they didn't get their stuff to us by 31 October we couldn't guarantee getting it all done in time.

We started sending reminders out in good time but, guess what, 60-70% of client info arrived in the last two weeks of October with a significant element being incomplete, creating 3 months of grief.

After a chat with a psychologist client 10 years ago, we decided that 3 months was more than enough time to get the stuff together and so just told clients that our deadline was now 5 July and, guess what, in 2008, over 70% of info arrived by 5 July, with many clients expressing relief that they wouldn't have the usual summer/autumn worry that they hadn't done it.

With improvements in IT etc many clients now get their info to me in April and, with regular monitoring of cloud accounts, books are often up to date and 99% ready for extraction within a month of the year end.

Thanks (1)
By Nick Graves
05th Jan 2018 13:23

Not just me then - I've gradually shrunk the practice over the years as I couldn't deal with the hassle of that SA used to be; it was Hell on toast.

Most of the clients remaining are pretty well-trained now, aside from the usual suspects with British Lastminuteitis.

And I really don't mind being slightly more desk-bound when it's too miserable to go out and play or go round and give real business advice, etc.

It was actually what really boiled my [***] about Middle-Digit Taxation; just when I'd got it all nicely under control, The Extorters wanted to mess it all up again...

Thanks (0)
avatar
By Trish Baillie
05th Jan 2018 15:09

For the record I still have 35 returns to prepare out of my original 286. Of the 35, 20 are "untouched by human hand" and the information has not yet been received. There are 15 that are works in progress and a further 27 are out with clients for approval. It is the same few who are late every year - they are always effuse in their apologies for being late but they just add to my grey hairs! I have managed to educate some of my late comers to produce the information earlier and was very pleased to get them done before Christmas. I dislike the last minute rush jobs as that is when errors are likely to creep in.

Thanks (0)
By Glenn Martin
05th Jan 2018 15:47

You lads need to sign up to some winter hobbies instead of this Golf nonsense.

I am fishing the Amble open fishing competition on Sunday, the No 1 event on the local fishing calendar with £5000 prize up for grabs.

I am not hoping for a repeat of a few years ago when I fell on the rocks and nearly ended up in the sea, with both arms fractured and had to finish tax season typing like a praying mantice, hence my aversion to a busy January now.

Surely sports where you can actually die or get injured are more exciting and appealing than working around a field wearing bad taste clothing.

Come on man powder blue slacks????

Thanks (0)
avatar
By North East Accountant
05th Jan 2018 16:06

Out of interest have just looked at the Tax Return 1997 list of January 1998 late comers.

Those that are still clients are on the January 2018 late comers list.

Some people like things done straight away and others like to leave it to the last minute.

Good job everyone doesn't want it straight away otherwise the summer would be awful.

Thanks (0)
avatar
By mabzden
05th Jan 2018 16:19

I don't know who are worse - the clients who leave it to the last minute or those who provide their information early.

I find the early birds can be a little OCD and expect the tax return to be done immediately because they're in a panic about something or other.

A few years ago one of my clients resigned citing what he considered to be "unacceptable delays" in completing his return. It was 19th April ...

Thanks (2)
avatar
By Eddystone
05th Jan 2018 18:37

Well, pleased to see that I'm not alone. Same tardy clients every year and if anything getting worse, still loads to do. They think, correctly for the most part: "it won't take long to do mine" but don't realise another 30 clients are thinking the same thing.

Still, looking on the bright side, what else do you do in January anyway ? More time for sailing and outdoor stuff in the summer, and lots of money comes in too !

Thanks (0)
avatar
By Eddystone
05th Jan 2018 18:37

Well, pleased to see that I'm not alone. Same tardy clients every year and if anything getting worse, still loads to do. They think, correctly for the most part: "it won't take long to do mine" but don't realise another 30 clients are thinking the same thing.

Still, looking on the bright side, what else do you do in January anyway ? More time for sailing and outdoor stuff in the summer, and lots of money comes in too !

Thanks (0)
avatar
By Brian Mcculloch Glasgow
06th Jan 2018 11:48

I agree with Glenn Martin that it is all in the mindset of people who think that January is a busy month. Well of course it is, as every year this is the month that is the busiest because of all the pending works.

Thanks (0)
avatar
By Michael C Feltham
06th Jan 2018 13:17

All depends on the client profile of a practice.

The bottom echelon of SMEs (numerically) are the majority. (See below).

These tend to be utterly hopeless at record keeping and haven't a wee clue about the financial health of their business.

One can ask, repeatedly, for records (Including Pension Statements) for months, and one can guarantee they will waltz in with the trusty Tesco bags in January!

And despite simple list of what one must have (Paying In Books, cheque book counterfoils, bank statements etc) they will ALWAYS have forgotten a number of critical items!

Mention the additional (minor cost) of a good bookkeeping/payroll third party agency, and they freeze, and look at you like a rabbit fixated by the powerful headlights of the juggernaut about to squash 'em flat!

It will be IMPOSSIBLE to deal, accurately, with MTDfb with such clients.

From Government's own stats:

Total Business Population of UK: 5,389,450

Number of Sole Traders with no employees: 4,077,590

Thanks (0)
Replying to Michael C Feltham:
Teignmouth
By Paul Scholes
06th Jan 2018 13:33

So, to avoid the disproportionate stress that these clients produce, you just stop dealing with them.

It is not a given that January is disproportionately busy, quite the opposite, it is now probably my least busy month, the choice is the ours, not the client's.

Thanks (0)
Replying to Paul Scholes:
avatar
By NH
06th Jan 2018 13:46

Thats easy to say Paul when you are not relying on those clients for income, not everyone has that choice.
I do agree however that it is a matter of choice as to whether one accepts the extra stress or not, personally I thrive on having 3 times more work than usual, having a very tight deadline and working everyday (and night) for 3 weeks.

Thanks (0)
Replying to NH:
Teignmouth
By Paul Scholes
06th Jan 2018 15:31

I too used to think that I relied on these sort of clients but after reducing my client base by about a third a few years back and maintaining the same fee level the next year, I was proved wrong.

Obviously, when you’re starting out, you tend to take on anyone just to get the thing going but hopefully you begin to realise that a number of painful clients are denying you the opportunity to do more work for your painless clients (or to find more painless clients), and it’s the painless clients that are valuable both financially and mentally.

Fair enough if you thrive on the 24/7 stuff (and wouldn’t prefer to be at home) but I never did, I didn’t see why I should, and so, as I say above, after 10 years of it I decided to put number 1 first and, overnight, the work spread out over 10, rather than 3, months.

Thanks (0)
avatar
By Eddie S
06th Jan 2018 14:46

I suspect I've said this before, but all this discussion reminds me of the client who emailed a member of my team '....and they have you working on a Sunday??'
I was being copied in and couldn't help myself from responding '..no, YOU have her working on a Sunday!'
Having 'retired' and only completing 50 returns this year I just have 1 to finish off.

Thanks (0)
Jennifer Adams
By Jennifer Adams
07th Jan 2018 14:32

Similar to Eddystone - my heart sinks when clients say 'it wont take long!' but it heart sinks even further when they say 'you wont have much to do - it all balances as per Sage'... and then you find personal bank accounts loaded (I even found an ISA once) and best of all a Suspense account of at least £2k.

Thanks (0)
By Glenn Martin
08th Jan 2018 14:26

Although I don't use it anymore I am still registered with Service Start

I think I was registered for the North east area and there has 10 requests come through today so far for people wanting SA returns submitted.

So these are not just people who are bad at bringing in books they have not even decided to do something about it and appoint someone with 3 weeks to go.

Thanks (0)