Self assessment: How was your busy season?

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While it’s the same clients as always filing their returns late, practitioners this year have implemented strategies that should ease their SA filing burdens in the future.

It was a similar story for many practitioners this busy season: the same clients waited until the last two weeks to bring in their tax return information. No matter what strategies accountants enforce, human nature dictates that there will always be last-minute clients.

Deadline chasers

HMRC’s figures verify this: 758,707 people filed their tax return on the 31 January, with the most popular hour being between 4pm and 5pm for 60,596 of those taxpayers. 

In what will be a familiar story to many practitioners, 30,348 people waited until the final hour to submit their tax return. But that does mean 745,588 SA returns are still outstanding.

“I think [there] might have been an overall sigh of relief that MTD wasn’t happening, and then all of sudden we remembered that we had to do tax returns,” Nigel Harris from Burton Sweet told AccountingWEB’s on the No accounting for taste podcast.

“This year there was a bit of weekend working. Talking to one or two people in other firms, they were doing 8am - 8pm seven days a week. It’s certainly not getting any better.”

While Harris found this year “marginally busier”, practitioners have generally become wise to their late-filing clients. Granted not enough to fully banish the end of the January rush, but AccountingWEB members have tested some solutions to break the busy January cycle.

Financial penalties

Jaded by burning the midnight oil during the previous year’s self assessment season deadline, practice owner and AccountingWEB writer Jennifer Adams vowed against over-stretching herself just so her late clients wouldn’t incur a £100 penalty.

This past tax season she enforced a financial penalty system for those who didn’t bring their information before the end of September. On a similar note, AccountingWEB contributor Philip Fisher suggested that accountants should mirror the premium pricing structures adopted by airlines and Broadway theatre when completing tax returns.

But while AccountingWEB members enjoyed some semblance of success through financial penalties, Adams said the same clients still ignored her sanctions. Her ‘am I too good to my clients’ epiphany was hammered home during a networking meeting when a bank manager told her that other local accountants would let their clients “take the hit”.

Incentive rather than penalty

For Harris, the financial penalty approach wasted so much time with the admin and clients arguing they weren’t going to pay it, it barely seemed worth the effort.

“We’ve tried both the carrot and the stick approach and putting on a penalty for people that have come in say after Christmas just didn’t work at all,” he said.

But Harris found more success through offering a discount for people who brought their information in earlier. “To say if you bring your tax return in before the end of July or something like that, we will give you 10% off, that’s easier administratively to manage as well,” he said.

Client management

Another popular method AccountingWEB members utilised was shifting their deadlines earlier in the year. Readers like ireallyshouldknowthisbut even filed 70% tax returns before December, so they won’t be doing “silly hours” in January.

This level of client management means AccountingWEB member Matrix has not yet said goodbye to deadlines. “I am having to prepare a set of accounts each day at the moment since my organised clients gave me their books in January for Oct/Nov/Dec year ends,” they reported on Any Answers.

“Next year I will start these accounts in January as soon as I receive the records and not prioritise disorganised clients' tax returns over relationships with more valuable clients.”

Another form of client management strategy that has proved successful for some practitioners this year was taking clients out of the self assessment process altogether.

AccountingWEB regular Tornado decided that they no longer wished to “spend hours on the phone to HMRC trying to sort out petty matters for effectively no fee”. So instead, Tornado has persuaded smaller clients with “simpler” tax responsibilities to opt out or submit the returns themselves.

“I am quite pleased that I will now be able to concentrate on more rewarding tax and accounting work and HMRC can sort out the endless queries from the simpler clients instead,” Tornado said.  

As a result of this client categorisation, Tornado has reduced the workload without “significantly reducing income”.

Busy season all year round?

But trouble may lie in wait for practitioners in the form of Making Tax Digital, which could potentially spread the busy season headaches throughout the year.

“The demise of tax returns is looming. HMRC can populate so much of tax returns, rather than the accountant scrambling for information which the tax department has in the first place,” said Harris.  

But while prepopulation of interest and company dividends would take a huge proportion out of tax return filing, lazy clients and human nature remain a problem, especially if MTD means multiple submissions and updates.

“Are [the clients that leave everything to the last minute] going to leave everything to the last minute four times a year?” Harris questioned.

“That’s just a nightmare. The last day of the month or every quarter, it is going to be the same clients bringing in their carrier bag going: I’m I too late? And under MTD the answer is, yes you are too late.”

 

How was self assessment season for you? Was it better or worse than previous years? What would you do differently next year? Or what did you do this year that helped lessen the January stress?

About Richard Hattersley

Richard is AccountingWEB's practice correspondent. If you have any comments or suggestions for us get in touch.

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13th Feb 2018 12:05

Download client list from HMRC in early December. Identify outstanding returns, estimate number of days required, send out first reminders by duplicated emails.

Early January, second email reminders. Turn away all new work - these people will be last minute every year and the client list will get progressively loaded with them.

Keep a close eye on the days left and the days required. More reminders - phone or email - where required, but more to cover myself than save the client a fine - that's their problem! This year all done by the 29th, but that's so much better than stress, stress, stress!

Early February, rate clients 0-5, nought being the ones I'd like to lose, but this is usually wishful thinking!!

Thanks (0)
13th Feb 2018 12:17

Hi Richard, you know my position on this.

Didn't quite manage to take 31st off, had one slacker I felt sorry for - had to finalise his return and press submit on 3 others.

Did manage to take Mrs KA for lunch, pick the kids up and go for an early dinner/supper/tea ('name'options for Lion's benefit).

Had lunch on 1st Feb with 4 other sole practitioners and all had had a similar 31st - included 2 Taxfiler users who hadn't been aware the site had been down for the best part of the day.

For any Accountants who have a manic stressful January at work because of the tax deadline, they only have themselves to blame. They need to run their business properly.

They could do with a decent business advisor...

Thanks (1)
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13th Feb 2018 16:04

Self righteousness abounds. I use taxfiler and it takes me about 10 mins to submit check file and receive confirmation of receipt from HMRC, however using their software the process takes about 30-45 mins so all clients are being moved over now. I keep 31st if a weekday for recalcitrant submitters and am happy to do so , many have recommended good clients to me

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to carnmores
13th Feb 2018 16:32

"Self righteousness abounds"

And why not, this really is a pretty easy business model.

Do a decent job, charge reasonable fees and clients will stay with you for years and recommend others to you.

Why make it difficult for ourselves with poor planning.

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to Kent accountant
13th Feb 2018 17:32

you might have misunderstood , all this nonsense like ... if i haven't received all the documentation by 31st December etc etc ... these sort of firms are hardly customer facing , their clients should walk out en masse

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to carnmores
13th Feb 2018 18:03

Ok, point taken.

I don't impose those deadlines, in fact of the 108 tax returns completed, 57 were done in January.

But I'll still feel self righteous, thanks.

The point is we have a set amount of work to complete each year. I expect the mix of work to vary across the year but not necessarily the quantity (unless there is an increase in client numbers).

So January is busy, but then so is June and July.

In some respects this is because we have very few sole traders.

We as a profession can either wander along in a haphazard fashion and then in December enter blind panic mode as 'tax return season' arrives.

Or we can plan our work load so work is spread throughout the year

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