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What we learned from January 2018: The good, the bad and the ugly

5th Mar 2018
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Tax returns may be over for another year but they're not out of mind. After a month’s reflection, Lucy Cohen from Mazuma Accountants shares what improvements her firm has planned for the next SA season.

As most practice accountants can attest, January can be a pretty stressful time. And no matter how well you have planned, how much HMRC has spent on advertising, or how much you have warned clients how busy it is, it pretty much always feels like pushing water uphill for one reason or another.

So in our practice, we’ve taken the opportunity to look at what we’ve learned from January and what we can do to improve it next year.

The good

Despite the seemingly never-ending stream of clients who left everything until the last minute, we filed everything that we were able to on time. If a client came in with work to complete, it was done and filed by the deadline. We’re happy with that. And overall that matched a trend.

HMRC reported that a whopping 10.39m self assessment tax returns were completed ahead of the 31 January deadline which is more than 92% of the total returns expected. That’s pretty good going all things considered, and is probably tied in with the fact that 89% of taxpayers filed their returns electronically, either themselves or through an agent.

We see it as overwhelmingly positive that people are getting to grips with filing information digitally - this bodes well for accountants who will be able to harness the power of software and apps to gather information electronically, ultimately enabling them to perform their jobs more efficiently. We’re all for that.

The bad

In our firm, we have a comprehensive and structured chasing schedule. We allocate time throughout the year to chase clients for information in order to get their tax returns completed.

Most clients will be chased at least once a month from April onwards. In the previous 11 January's we have faced as a business, this strategy has been remarkably effective and has left us with a relatively stress-free January. But this year, despite our best efforts, we still had a not-insignificant number of clients who waited until January to provide the missing information.  

We need to ask ourselves why. This January was certainly the worst one for a while in terms of this sort of problem. Perhaps we’ve built a rod for our own backs - even those clients who leave it late ultimately had their returns filed on time.

So why does it matter to them whether they give us the information in May or January? Where’s the drive to get it done sooner if the end result is that we always come through for then anyway?

Or perhaps people are becoming a little communication-blind? Are we sending them so much information that it’s getting lost in the white noise of everything else? Or maybe our communication is no longer as relevant as it was and we need to mix it up a bit to get the response we want.

These are questions that we’ll be asking ourselves over the coming months and looking to address.

The ugly

January was a particular challenge this year because of staff sickness. I’m sure everyone has noticed the lingering and particularly nasty coughs and colds that have been around this winter. It hit us hard. On one day we had nine out of 24 staff off sick. When you’re trying to deal with January in the accountancy world, that’s a real challenge.

So how do you combat this? We know that sometimes people get ill, especially over the winter months. So when illness and tax deadlines collide, what’s the solution?

Does the firm introduce surge pricing, thereby charging a higher fee to clients who leave it late? From an economic standpoint this idea is appealing. It means that in January where sickness is high and deadlines are tight, overtime could be easily afforded and covered by the price increase if necessary. But for clients, it’s obviously a massive turn off.

Or maybe we improve our infrastructure which would allow staff to work from home more easily and get their work done without spreading germs around the office and therefore containing an outbreak of the winter sniffles. There’s an upfront cost to the business to do this, but would the investment pay dividends in the future?

These are all things that we have taken from our January 2018 experience and we’ll be looking at them over the next couple of months to see how we can improve going forward.

In the meantime, we’re enjoying the relative quiet of February and March until it all starts again in April.

Replies (4)

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By mbee1
05th Mar 2018 12:43

All of our tax staff can work from home and are supplied with a laptop. Sometimes they feel to ill for a long commute but can roll out of bed and continue to deal with emails and Returns at their own pace. If anything comes into the office that needs urgent attention it can be scanned to a shared folder that they can access. This also works for public transport disruption and the bad weather we had last week. I left the office early on Wednesday and first day back today but I kept on working. To us it's the way forward.

Thanks (1)
By Paul Scholes
05th Mar 2018 13:54

Just a tip - if you give people a deadline the majority will work to that, and so, no matter how many times you chase them, if you tell them that the tax return deadline is 31 January, a significant number will take that as permission to bring in their stuff in January.

Like many firms, we used to tell clients that our deadline was 31 October and that, if they missed it, we couldn't guarantee getting the return done by 31 Jan. So perhaps 70% of clients brought their info to us in the latter half of October.

So, ten years ago we just told them in April, when we sent out checklists etc, that our deadline for the info was 5 July and, guess what, 70% got the stuff in by 5 July. Ten years on that's over 80%.

We bolstered this with a threat of a sliding scale of extra charges if they missed our deadline rising to +100% if after 1 December but I've hardly ever had to impose this because clients are good at asking for an extra week or two and any who would have left it till after 1 December are no longer clients, someone else can put up with them.

Thanks (2)
By Vaughan Blake1
05th Mar 2018 15:20

Personally, I think sending out the first letter in April is too soon. Most folks won't have all their stuff and so your letter goes 'in the pile' and gets forgotten. I write in early June, by which time most clients will have all their stuff and so can reply straight away.

Sending monthly reminders from April will make them into some sort of paper/electronic 'white noise'. I just do two reminders, one at the end of September and another in the first week of January. Seems to work well and we had just two O/S on 31 January from over 1,000!

Thanks (4)
By Terry Hyman
06th Mar 2018 12:02

All the reminders in the world won't stop those recalcitrant clients from delivering their records in January, so I am past worrying about it. If the stuff arrives I deal with it. If it's late I deal with it then.
What does concern me is that even if 10.39m returns did go in by the deadline it still means that 900,000 didn't. I hope those people don't qualify for MTD returns!

Thanks (0)