As Philip Hammond prepares to reveal his Budget, accountants are stuck in an awkward position of trying to guide clients without knowing what Spreadsheet Phil has hidden in his red briefcase.
Like any issue that presents potential complications for clients or their businesses, there is an opportunity for accountants to be proactive and communicate any potential problems.
But how do accountants navigate the days of uncertainty before the Budget? More to the point, do clients actually care what the Chancellor has to say?
Accountants draw up wishlist
Whatever Hammond announces on Wednesday, practitioners have already drawn up their Budget wish lists and predictions. From the responses on AccountingWEB, practitioners are predicting a “non-Budget”.
Neil Tonks, for example, said: “Hammond will be under pressure not to do things which will need a lot of Parliamentary time next year, as parliament will be busy with Brexit-related legislation. So expect tinkering at the edges, with changes to rates and thresholds mainly, not new initiatives."
Who cares about the Budget, anyway?
However, the same engagement cannot always be said for many of their clients. For the most part, evidence from Any Answers suggests that many clients are not swept up in pre-Budget intrigue.
But that’s how it has always been for Paul Scholes. Over the course of his 36-year career, Scholes could only recall two occasions when a client has contacted him in advance of a Budget.
Why is this? AccountingWEB regular Tornado theorised: “With Budgets appearing so frequently, their importance has been diminished and I think most feel that there is always going to be an overall increase in taxation anyway.”
Meanwhile, Matrix felt so “bitten” by Making Tax Digital that they have opted for the safer option of not saying anything until proposals become law.
But while there are only scraps of information and plenty of speculation swirling around Hammond’s Budget, the fiscal event does present the opportunity for practitioners to demonstrate their value.
Matrix said that they have already had conversations with a contractor client whose contract has recently ended. Weighing up their options, the client considered either permanent employment or another contract.
If Hammond takes a swing at contractors, Matrix warned “that the off-payroll rules could be extended to the private sector since I would prefer to make clients aware of the risk in any discussions to assist with decisions and negotiating rates”.
Elsewhere, DJKL has spoken to a few clients with June and September year ends that will need to embrace new software if their hunch is right and the Budget will result in more MTD and VAT detail.
The potential upheaval a Budget presents also gives practitioners a chance to sit down with clients and review any worst-case scenarios. “[I’ve] had a chat with a couple regarding whether we may see a change in the daft tax effect from £100,000 to £123,000,” DJKL said:
“They are looking to clean out a couple of small pensions but they end up slap bang in 60% regarding most of the withdrawal, so we decided to wait and see if a change (not holding my breath) was forthcoming as if there is one we would wait until post-April.”
On the day, practitioners will surely congregate in front of the television, or patiently wait for the Treasury to drop the umpteen pages of Budget documents. Despite little client interest before the event, practitioners are sure to be sharpening their pencils shortly after Hammond sits down from the dispatch box.
The annual ritual of Budget client communication is still a safe bet. For instance, Sarah Douglas sends a roundup of the key points emerging from the Budget to her clients, which garners an impressive 90% response rate.
However, the need to communicate this quickly has never been more important. For Matrix, it’s always best that the client hears any changes from them first. “I would get my summary out to clients on the same day if there was anything affecting small businesses since I would prefer to be proactive rather than reactive - in case they saw something on twitter and panicked.”
Once again, the 2017 Practice Excellence data shows the most successful practitioners are using community-based digital marketing. An event like the Budget is an opportunity for practitioners to engage with their community outside of using the social channel as a prospecting device.
But ultimately, accountants are still somewhat handcuffed by what they can advise clients before the event. As lionofludesch said: “[A] lot of it is madcap ideas thought up in the car on the way to Westminster. Who'd have predicted MTD or 16½% VAT rates? So what's the point in speculating?”
What preparation do you put into the Budget? What’s your Budget routine on the day? What do you send out to clients afterwards, and does it generally work for you?
About Richard Hattersley
Richard is AccountingWEB's practice correspondent. If you have any comments or suggestions for us get in touch.