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Busy season: There is a better way

Christmas and January are ruined for many accountants and bookkeepers by the onset of self assessment season. It’s time to bring this tradition to an end, argues Jane Aylwin.

26th Nov 2019
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Don't let self assessment season get you down
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Isn’t it strange how suddenly the 31 January self assessment deadline looms into view and casts its shadow over the impending holiday period.

Maybe if you’re luckly, you’ll get some time off this year to spend with your family and loved one.

Like many accountants and bookkeepers, tax returns were my least favourite service when I worked in practice – there were too many returns to deal with in too short a time for too little money. And clients were rarely grateful for a service that ultimately required them to pay tax.

Even though you set up your information-chasing systems in April, you still end up having the same conversations you have every year explaining what payments on account are and why they need to be paid.

And there will always be the clients who inform you after you submitted their tax return that they forgot to let you know about the property portfolio they inherited earlier in the year.

It took me 11 years of running my practice to figure it out, but there is a better way of approaching tax season.

The phrase that I urge every bookkeeper and accountant to learn as part of their training is: You deserve to be fairly remunerated for the valuable work that you do.”

Clients may not like paying for their tax returns, but that does not affect how much you should charge for a very valuable service. If the returns and payments are late, the penalties can escalate – raising the risks of an investigation and yet more penalties.

Your care and professional expertise is what will save the client from suffering these costly and stressful problems.

It may be too late to alter the volume of your final tax season workload, but you can start thinking now about how to prevent the usual scenario happening next year. More importantly, you can start laying the groundwork to ensure you make reasonable money from the tax returns you do.

Price your tax returns for profit

Tax returns can take from 10 minutes for simple P60-filing exercise to much longer for complicated returns involving capital gains, rental income, foreign dividends and income, sole trader accounts and so on. If a service has become a cheaper commodity, the buyer psychologically places less value on it. But as I have argued, tax returns are a valuable service, so make sure you charge appropriately

Even a 10-minute P60 exercise will take around 2-3 hours when correspondence, chasing, checking and filing are taken into account. And that’s not mentioning any explanatory emails and regulatory overheads like GDPR that require extra time and cost to ensure you remain compliant.

Get clients to bring information in early

Ensuring your clients appreciate the pain and complication caused by late returns is important to underline your value, so communicating the potential fines and penalties and surcharges for late returns and payments will help raise their awareness.

Reinforce these messages by offering discounts for information received by 31 August and charge a premium for those that come in after the beginning of December.

Implement a CRM system

Client/customer relationship management programs can be set up to remind clients when you need their records, and to give them further nudges if they fail to respond. These tools should be part of your tax season armoury.

Don’t just send generic reminders, make sure you tell the client exactly what you need. Give examples of the types of information you need and tell them what was included last year.

Get the timing right, too. Sending reminders on 6 April is too early and most clients won’t have the information ready for months

Once your CRM system has achieved the goal of collecting their information, you can also use it to remind clients when they need to pay their tax, and how much id due. It’s easy to do and is a great way to enhance your client service.

Improving communication

The mechanised chasing and reminding process isn’t about being a pest and intruding on clients’ lives. It’s a way to stay in touch with them more regularly and to improve communication with them. P11Ds, for example, will be due in early July for many clients, so after you’ve dealt with self assessment returns, you could educate them about their obligations for expenses reporting and get them primed for the next filing exercise.

If you hate tax season, then start thinking about what is coming next. There won’t be the same December-January rush under Making Tax Digital for income tax – you’ll have quarterly deadlines falling for different clients every month.

Now that you’ve got their attention, it’s a good time to start making them more aware of how their reporting requirements will change. Like MTD for VAT, this can help you to grow your services, get to know your clients better and get your internal processes in good shape!

This post is a summary of some of the points Jane Aylwin covers in a webinar for SmartVault on making tax season less painful and more profitable.

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