Year-end pressures on professional standards

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The pressures of year-end can lead to stress, short cuts and even breaches of professional standards. Here’s how to beat the clock

It’s the year-end and you can feel the pressure building.

There is tension in the office and during Teams meetings, as clients frustratingly submit information for their tax returns late or not at all. The risk of errors rises and, with so many clients to deal with, everyone in the team is feeling slightly overwhelmed.

It’s a common picture for accountants up and down the land. It can be bad news for accountants’ wellbeing and potentially the industry’s reputation.

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AAT understands the difficulties, but it is also keen to reduce the number of complaints it receives relating to year-end pressures. It does not want accountants to act in a way that would bring the profession into disrepute, and it urges members to familiarise themselves with the guidance and help sheets it has produced (which are available at aat.org.uk). AAT hears grumbles that accountants are not obtaining consent from clients prior to a tax return being filed because the deadline is so tight.

Other taxpayers are upset that they were not given enough time to scrutinise a return before handing it back to the accountant.

“Often accountants will assume everything is fine because they have verbal consent, but the guidance states the importance of obtaining and retaining evidence of client consent,” says AAT professional standards officer Adam White. “If this doesn’t happen and there is an error, it comes down to a ‘he said, she said’ situation, which can be a problem.”

Fellow professional standards officer Donna Drew says accountants can make the mistake of thinking they are doing their client a favour by submitting returns without written consent because it will avoid late filing fees.

“This is a common reason, but there can be serious implications should AAT receive a complaint,” she says. “Some members are not as familiar with the guidance and our code as they should be.”

Risks

By not following the guidance, an accountant could face potential negligence claims. This highlights the importance of professional indemnity insurance.

When it comes to dealing with errors, firms are responsible for a return being accurate based on the information provided.

“But this is not a get-out-of-jail-free card for accountants,” says White. “An accountant has a professional and ethical duty to ensure they are not associated with any return they have doubts about and think could be incorrect.”

Errors can often become clear during the following year and an accountant’s duty of confidentiality can make the situation uncomfortable when it comes to disclosing errors to HMRC.

AAT guidance explains the steps members should go through and reiterates the importance of allowing enough time in the initial review process to spot any errors prior to a return being submitted.

Deadlines

One way to alleviate some of the year-end pressure is to be tougher with clients when it comes to setting deadlines for receiving information.

Many AAT members now offer discounts for early submission of tax information, while others are not afraid to resign clients that are consistently late and put unwanted anxiety on the accounting team.

Good communication is crucial and accountants can protect their reputation by making it clear if they will be unable to get a return in before the deadline because there is not enough time to review the information properly.

“There are other ways to avoid too much pressure, including not taking on more work than you or your firm can reasonably do,” says Drew. “Don’t over-promise and then under-deliver. This isn’t just about not taking on too many clients, but also not doing additional work out of the goodness of your heart because you feel a sense of obligation to the client.”

She adds that accountants and their clients cannot expect a sympathetic ear from HMRC when things do go wrong.

“I’ve not seen a case yet where HMRC has overturned the penalty given because of an error caused by the actions of one of our members. They feel it is the taxpayer’s job to get returns in on time and if there is an issue between client and accountant, it is up to them to sort it out. Often that can mean a complaint lands on our desks.”

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“Smooth out your workload through communication”

Alastair Barlow has worked with companies of all sizes over the past 20 years, from start-ups to multinationals, and he believes good planning is the secret to reducing year-end pressures.

The founder of Flinder, a company providing accounting services and management information support, Barlow communicates with clients on a monthly basis so his team does not feel inundated with work at one time of the year.

He always stresses to clients the importance of deadlines and would resign a client if they were consistently late in providing tax information.

“When it comes to planning, this means setting deadlines and being good at planning your employees’ workload,” he says.

Barlow is also an advocate of charging clients a premium to work with them in the busy season. By the same token, he may also offer customers a discount if they buy services during the firm’s quieter times.

“Errors appear when people are under time constraints and rushing,” says Barlow. “But at Flinder we would not let anything go out of the door unless it has been properly reviewed. You must still have the authority to review things even if you are coming under pressure from the client.”

He always makes sure his team feels supported. This includes looking for pinch points during the year and discussing ways to evolve different processes, so the firm’s workload is smoothed out throughout the year. This includes adopting technology to handle tasks that were previously undertaken manually.

“Manage clients early to get ahead of issues”

Don’t assume client directors and entrepreneurs are aware of what they need to do when it comes to filing their tax information.

This is the message from Chris Conway, director and co-founder of Multiply Accountancy, who says one way to reduce year-end pressure is to improve your client management.

“My approach has always been to assume no knowledge and outline the timelines and stages clearly from the start,” he says. “If the client needs help, you can step in and address problems early. This isn’t always possible because you may not have the luxury of time if it’s a new client with a pressing deadline. In this circumstance, it pays to manage the client’s expectations and if it’s not possible, say so.”

To avoid errors coming back to haunt the accountant and the taxpayer, Conway’s advice is to keep records of all correspondence, including outlining when reminders have been sent.

“Some clients can never be persuaded to provide information on time, and they are probably the same ones who pay invoices late or expect you to drop everything when they need something,” he explains.

“My view is that the ability to get something done on time is largely down to the nature and personality of the client. Some are very organised and are well-prepared ahead of deadlines. Others are consumed by running their business and prioritise things differently. It is in everyone’s benefit to lay the cards out on the table clearly from the outset.”

“Simplify the process as much as possible”

CARL READER admits he leaves his own tax return to the last minute, so he understands how human nature can make accountants’ lives a misery.

The Director at D&T says it is all about communication, including reminding clients that they face fines from HMRC.

“We try to incentivise clients with discounts for early submission and many of them like to be given a hard deadline by us,” he says. “We provide a clear checklist for them to follow. They also tend to pay us monthly, which enables a regular dialogue.”

He believes that ongoing communication means there should be time to review errors. He also stresses the importance of following industry best practice, such as AAT’s guidance.

“This is vital because without it we could see more fraud. The guidance is also crucial for the industry’s reputation and for taxpayers who do the right thing.”

What AAT’s guidance says

When experiencing pressures around year-end, consulting AAT’s Professional Conduct in Relation to Taxation guidance can be useful (available at bit.ly/3G5J3gY). Key points are:

  • When it comes to dealing with errors, it is important to establish the facts, and a client should be informed about any errors as soon as possible.
  • Explain the fees involved when an accountant claims a repayment on the taxpayer’s behalf due to a mistake.
  • The risk of errors when there are time pressures demonstrates the importance of keeping appropriate records.
  • An accountant should not give the impression they are assisting a client to commit or conceal an offence.
  • Where a firm has made an error, they may need to notify their professional indemnity insurers and take legal advice.
  • Ultimately it is the taxpayer’s responsibility to submit current and complete filings, and the accountant’s role to prepare filings on client’s behalf based on the information provided.
  • Making Tax Digital means members must also be aware of online security issues when digital filing. This includes having cyber security and GDPR policies in place.
  • When communicating with HMRC, consider explaining that you are relying on information supplied by the client.

Steve Hemsley Is a journalist, media trainer, and podcast presenter. .

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