Incentivise your clients to get their processes in order before January

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How can accountants incentivise clients to submit their tax forms before the end of the year, to avoid the rush in January?

Every year as the annual self-assessment tax return filing date looms, there is an inevitable rush as people return from the Christmas break and work to get their accounts in order before January 31 to avoid a late filing penalty.

“As accountancy experts working predominantly with contractors, freelancers and small businesses, we always encourage our clients to file company and personal tax returns early,” says Victoria Kelly, Practice Manager at Nixon Williams.

“We appreciate and acknowledge the reality, which is that our clients are busy getting on with their jobs or running their businesses and therefore planning their tax returns isn’t always at the top of the priority list.”

She says that’s where regular communication and a series of well-planned reminders before the deadline can really help.

“We have a number of different systems and communications channels open to ensure our clients are made aware of the impending deadline in plenty of time,” she explains. “These include e-newsletters and social media, as well as direct contact via email or telephone from designated account managers.”

The advantages for the client

“Tax experts can encourage clients to file company and personal tax returns early by drawing their attention to benefits of doing so,” says Nick Latimer, a Tax Partner within the Cheltenham office of national audit, tax, advisory and risk firm Crowe UK.

“Not only does it maximise tax planning opportunities, but it also enables more time to identify and manage any issues that arise.”

In addition, savings can be made by starting the process early.

“A saving on the bottom line is one that most entrepreneurs can readily appreciate,” he explains. “They should also be made aware by their tax advisor of the ability to carry back tax relief in areas such as Gift Aid donations or Enterprise Investment Scheme opportunities in qualifying companies.”

Start reminders early

“Reminding clients about the deadline from as early as possible can help keep it on mind throughout the year,” says Robert Grant, Head of Accounting at Crunch.

“Start messaging in April when tax is on the brain as clients have their P60s available, and provide starter information on what is needed to prepare their Self Assessment. Increase this messaging in July when P11Ds are ready and the 31st July deadline is looming.”

Although fear of fines is an obvious way to encourage clients to get their Self Assessment done before the end of the year, he says that reminding them of the positives can be just as effective.

“Some lucky business owners (especially those who mix self-employment with salaried employment) could be owed a tax refund.”

HMRC will let people know if they’ve overpaid tax as soon as they’ve filed their Self Assessment and will process refunds within a couple of weeks.

“Letting clients know of the potential of getting money back is an incentive in itself, especially if they do it before Christmas where a few extra pounds could come in handy!” he says.

Use all available channels

These days, clients work and communicate in diverse ways, so, a multi-pronged approach is best when it comes to getting the message across to clients, says Robert Grant.

“When our clients are in their Crunch software, a message will appear on their personal dashboard about the need to prepare for the Self Assessment deadline. We’re also active on social media and post regular updates about HMRC’s requirements.”

Sending out personalised emails as well as monthly newsletters with information about what to do can also be a useful tactic, he says.

“Don’t forget the human touch. Communicating with clients face to face or on the telephone is often the best way to provide advice, offer encouragement and put them at ease, to ultimately encourage them to file early.”

Managing expectations

As well as gentle reminders and encouragement, clients also need to know what happens if they don’t file on time.

“We also make a point of telling our clients what the potential impact of non-delivery could be to help encourage them to work with us and ensure their returns are filed on time,” Victoria Kelly says.

“The workload involved varies from client to client, but our accountants will always speak with clients to manage their expectations in terms of how much time we believe we will need to get everything in order. Sometimes, if billed separately, there is also an opportunity to reduce the applicable fees when information is received in plenty of time and processed, and of course this is in our interest too as it helps significantly with resourcing.”

Nick Latimer suggests making clients aware of the consequences and possible fines for failing to meet deadlines.

“Regular face-to-face meetings are useful for consistent reminders of deadlines and present an opportunity to highlight the importance of taking early action,” he says.

Why clients file late

Some of the common obstacles are missing information and work pressures.

“Given the potential fines for a late return, it can be quite stressful for our clients and we always remind our staff to keep that in mind as the deadline closes in,” Victoria Kelly of Nixon Williams says.

“It’s really important not to be a nuisance when chasing information needed for a tax return, but equally that has to be balanced with being proactive and supporting our clients. Ensuring there is a good relationship and rapport built up over time with each client is key to that, so it becomes simple for them to respond to requests.”

Nick Latimer says missing paperwork is a perennial, but this often highlights a reluctance or slowness in adopting new technology to help support all accounting and administrative functions.

“Where a third party such as an external bookkeeper or broker is involved, delaying the preparation of company and personal tax returns too close to the deadline may create logjams at the supplier, leading to pressure all round to meet deadlines,” he says.

Allocating extra resources

However, despite all the due care and diligence in place, there will always be a rush at the end of January, so it’s always wise to plan resources as effectively as possible and start sending reminders as early as possible, says Victoria Kelly.

Marianne Curphey is an award-winning financial writer and columnist, and author of the book How Money Works. She worked as City Editor at The Guardian, deputy editor of Guardian online, and has worked for The Times, Telegraph and BBC.

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