I am not sure how people dream up ideas as to how they can avoid tax and then just do what they think is necessary without talking to a professional adviser. Very often their “cunning plans” can be very costly indeed.
I have dealt with a client who arranged for his father to give away his parents' house to him to avoid inheritance tax. Firstly, it did not work from the IHT point of view because his parents and then his mother after his father's death continued to live in the property. After his mother died he sold the property and then someone told him he might have a capital gains problem. He came to me then. Without going into detail, I managed to get him past the capital gains issue (and he easily could have ended up paying capital gains tax if he had not ultimately sought professional advice) but the irony was that both his parents' estates were below the IHT threshold so there never was any inheritance tax to avoid anyway.
I also come across people who think they can avoid capital gains tax by selling their assets pregnant with gain(as we tax people like to say) whilst they are spending a year or so overseas. This is actually a difficult thing to do, and even if possible with careful planning, our amateur tax avoiders do not realise that whatever overseas country they will be spending their time in may well seek to tax the capital gain. At the very least they could end up incurring a lot of professional fees in the overseas jurisdiction.
Yes, it is possible to avoid UK capital gains tax if abroad, but usually only if you are gone for quite a few years. It does not work any more going to Belgium for a year and getting fat on cream cakes and Belgian chocolate in their lovely cafes (Belgians must have an immunity to such temptations) just to avoid CGT, and lovely as New Zealand is, you would really have to be there long enough to go native.
If you think you have a bright idea to avoid paying tax, maybe based on something you heard at the yacht club or whilst going home on the bus, please talk to a professional tax adviser who will put you straight on what you can or can't do, and who will either give you a sensible proposal or let you down gently. A modest fee paid can save you an awful lot of heartache and perhaps a lot of money too.
© Jon Stow 2009
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Thursday, 10 September 2009
Friday, 28 August 2009
HMRC attacks construction industry workers
Towards the end of July HM Revenue & Customs published one of their famous consultation documents. I say “famous” because we have had quite a number of them in the past couple of years, and for the most part HMRC takes little or no notice of the opinions of tax professionals and other interested parties before doing for the most part what they always intended to do. The exception to all this was the major changes in the taxation treatment of trusts from April 2008, where HMRC should have had a consultation, but chose not to, blind-siding everyone with an attack on trust principles going back centuries.
It was clear that HMRC, or at least the Whitehall Mandarins, understood trusts not at all, thinking of them only in the context of tax avoidance. Trusts are generally just a way of preserving property for the benefit (usually) of others including children and grandchildren, and the idea goes back to the time of the Crusades. Anyway, I digress, but the point is that HMRC seems obsessed with their belief that there are bunches of scoundrels out there who should be paying more tax. This may of course be driven by a false sense of fairness, though there is also the likelihood that they want to get every penny they can because of Government spending and borrowing, and the general fall in tax revenues as a result of the recession. Of course there are dishonest people, but why use a sledgehammer to crack a nut, causing collateral damage to decent people?
So to the attack on the construction industry and in particular on subcontractors. Subbies, as they are called, are skilled workers and labourers engaged by main contractors or other subcontractors who work on building sites on the whole, and the term includes everyone who works on a building job from the people who clear the site, dig foundations, fit the plumbing and electrical circuits, through to the people who clean up new builds and attack the remaining dust with a vacuum cleaner.
HMRC thinks that many of these people should be treated as employees. The motive is because higher National Insurance Contributions are recovered from an employee and his or her employer than is levied on a self-employed person, who incidentally gets far fewer benefits from his limited contributions and no benefit whatsoever from the 8% rate of so-called Class 4 NIC which is effectively a tax on income and nothing else. The other motive for this attack must be that self-employed people can claim more in the way of expense deductions including usually travel and other sums expended that have to be “necessary” -in addition to being incurred wholly and exclusively- to gain a deduction for an employee. That word has led to a lot of argument in the Courts over many years.
There is ample case law to distinguish between an employee and a self-employed person going back many years. I have no problem with HMRC's general interpretations on this web page. One can see that to be an employee, an employer must have a degree of control over the worker and a degree of responsibility too. The hours worked will be decided by the employer, as will permission to take time off.
I can see a sort of case that some unskilled labourers might be casual employees if they provide nothing except their physical presence and hard graft; some of them. However, the idea that my plumber, brickie, electrician and carpenter clients are not self-employed seems to me absurd. The HMRC consultation paper, called 'False self-employment in construction: taxation of workers' says, at least to my mind, some quite absurd things:
“In order for the employment income deeming rule not to apply, the worker will need to meet one of the following criteria:
Firstly, to deal with the HMRC bullet points, most brickies, well all brickies, provide the tools of their trade. As I have seen suggested, should each brickie also bring his /her own cement mixer every time in order to fulfill the “plant and equipment” criterion? Should the brickie really bring his own materials to mix the mortar? Of course the brickie may bring a mate to work if the contractor is shorthanded, and may even send someone instead, but that is not common. However not supplying other workers does not make the brickie an employee. After all (please note HMRC tripe-writer) a brickie may have no work next week or the week after, and certainly no certainty of work next year. It is worse than normal because there is a recession. Some of my subbies' telephone bills are high this time round because they are telephoning main contractors, trying to find assignments and projects to work on. One of my plumbers has been out of work for some months recently. Also, some projects have stopped half way through through lack of finance. There is no certainty of work, and just imagine the impact on the big construction companies if they suddenly found they had loads of employees. The cost would see them out of business and the Government's housing targets an even more distant pipe dream.
So let us have some common sense. It is evident that most construction workers are not employees. They can choose their own time off, but they cannot have certainty as to when and where their skills will be engaged. Has not HMRC not got something better to do than overturn established principles of case law and potentially land another crippling blow on an already sick construction industry? Answers on a postcard to HMRC by 12th October 2009.
© Jon Stow 2009
It was clear that HMRC, or at least the Whitehall Mandarins, understood trusts not at all, thinking of them only in the context of tax avoidance. Trusts are generally just a way of preserving property for the benefit (usually) of others including children and grandchildren, and the idea goes back to the time of the Crusades. Anyway, I digress, but the point is that HMRC seems obsessed with their belief that there are bunches of scoundrels out there who should be paying more tax. This may of course be driven by a false sense of fairness, though there is also the likelihood that they want to get every penny they can because of Government spending and borrowing, and the general fall in tax revenues as a result of the recession. Of course there are dishonest people, but why use a sledgehammer to crack a nut, causing collateral damage to decent people?
So to the attack on the construction industry and in particular on subcontractors. Subbies, as they are called, are skilled workers and labourers engaged by main contractors or other subcontractors who work on building sites on the whole, and the term includes everyone who works on a building job from the people who clear the site, dig foundations, fit the plumbing and electrical circuits, through to the people who clean up new builds and attack the remaining dust with a vacuum cleaner.
HMRC thinks that many of these people should be treated as employees. The motive is because higher National Insurance Contributions are recovered from an employee and his or her employer than is levied on a self-employed person, who incidentally gets far fewer benefits from his limited contributions and no benefit whatsoever from the 8% rate of so-called Class 4 NIC which is effectively a tax on income and nothing else. The other motive for this attack must be that self-employed people can claim more in the way of expense deductions including usually travel and other sums expended that have to be “necessary” -in addition to being incurred wholly and exclusively- to gain a deduction for an employee. That word has led to a lot of argument in the Courts over many years.
There is ample case law to distinguish between an employee and a self-employed person going back many years. I have no problem with HMRC's general interpretations on this web page. One can see that to be an employee, an employer must have a degree of control over the worker and a degree of responsibility too. The hours worked will be decided by the employer, as will permission to take time off.
I can see a sort of case that some unskilled labourers might be casual employees if they provide nothing except their physical presence and hard graft; some of them. However, the idea that my plumber, brickie, electrician and carpenter clients are not self-employed seems to me absurd. The HMRC consultation paper, called 'False self-employment in construction: taxation of workers' says, at least to my mind, some quite absurd things:
“In order for the employment income deeming rule not to apply, the worker will need to meet one of the following criteria:
- provision of plant and equipment – the worker provides the plant and equipment required for the job they have been engaged to carry out, disregarding tools of the trade which it is traditional for a worker in the industry to provide for themselves to do the job
- provision of all materials – the worker provides all materials required to complete a job or
- provision of other workers – the worker provides other workers to carry out operations under the contract and is responsible for paying them.”
Firstly, to deal with the HMRC bullet points, most brickies, well all brickies, provide the tools of their trade. As I have seen suggested, should each brickie also bring his /her own cement mixer every time in order to fulfill the “plant and equipment” criterion? Should the brickie really bring his own materials to mix the mortar? Of course the brickie may bring a mate to work if the contractor is shorthanded, and may even send someone instead, but that is not common. However not supplying other workers does not make the brickie an employee. After all (please note HMRC tripe-writer) a brickie may have no work next week or the week after, and certainly no certainty of work next year. It is worse than normal because there is a recession. Some of my subbies' telephone bills are high this time round because they are telephoning main contractors, trying to find assignments and projects to work on. One of my plumbers has been out of work for some months recently. Also, some projects have stopped half way through through lack of finance. There is no certainty of work, and just imagine the impact on the big construction companies if they suddenly found they had loads of employees. The cost would see them out of business and the Government's housing targets an even more distant pipe dream.
So let us have some common sense. It is evident that most construction workers are not employees. They can choose their own time off, but they cannot have certainty as to when and where their skills will be engaged. Has not HMRC not got something better to do than overturn established principles of case law and potentially land another crippling blow on an already sick construction industry? Answers on a postcard to HMRC by 12th October 2009.
© Jon Stow 2009
Sunday, 16 August 2009
HMRC and customer service
I wrote recently about Government and in particular HMRC disenfranchising the non-technical population. It is a sad situation, and it means that some perfectly intelligent people and in particular those of an older age group, or perhaps those who work with their hands have to employ people like me to do tasks with which they could have coped if dealing in paper.
Because there is almost no one in HMRC with whom the ordinary population can speak who actually knows anything about tax, taxpayers just have to grub along or pay someone else. It gets worse as demonstrated by a visit I made to an older couple this week. Their problem was that another elderly relative had died and they had been left to administer the estate. They had been sent a Form R27 which, for the uninitiated, is a Return of income for the previous 6th April up to the date of death of the deceased, and which is completed by the Executors or Administrators of an Estate. The couple had filled in the form but missed out completing two sections. An Assistant Officer at HMRC had sent it back with the two sections marked with red crosses and asked the worthy couple to complete the details required. Of course they dud not have a clue which is why they had telephoned me.
Now in the good old days these Executors could have taken their papers and the form to the Tax Office and had help completing the form on the spot. Nowadays, even if they could find the person who penned the red crosses, he probably would not have had a clue either, which is why after a couple of months he returned the form with such an unhelpful letter.
I reckoned the repayment due to the estate was less than £100, but the couple had not collected all the information needed to fill in the R27. I dictated letters to the organisations concerned, which the wife took down in shorthand, and said that when they had received replies they would be able to complete the form and send it off. If they were still unsure they should call me.
I came away feeling unable to bill for my 45 minutes plus the short drive. I had done the tedious Money Laundering check because that is obligatory but by the time I had done an engagement letter, written the letters myself and dealt with HMRC I would have done far more work and costs would have far exceeded the refund due to the very small estate. Effectively I had to treat it as charity work.
HMRC calls taxpayers customers, but customer service has become an alien concept. When I was a young tax junior you could track down anyone in the Revenue and get things sorted out over the telephone, which is no longer possible with the call centres.
Why should I have to do for nothing something HMRC cannot be bothered to do because it has changed itself into an even less friendly organisation than BT or my bank? Yes, those who cannot afford to pay for representation can go to TaxAid, but why should they have to, and though I am happy to help out, I think we tax advisers and agents are taken for granted and not afforded proper respect by HMRC. However, if they treat their customers like that, what do I expect?
© Jon Stow 2009
Because there is almost no one in HMRC with whom the ordinary population can speak who actually knows anything about tax, taxpayers just have to grub along or pay someone else. It gets worse as demonstrated by a visit I made to an older couple this week. Their problem was that another elderly relative had died and they had been left to administer the estate. They had been sent a Form R27 which, for the uninitiated, is a Return of income for the previous 6th April up to the date of death of the deceased, and which is completed by the Executors or Administrators of an Estate. The couple had filled in the form but missed out completing two sections. An Assistant Officer at HMRC had sent it back with the two sections marked with red crosses and asked the worthy couple to complete the details required. Of course they dud not have a clue which is why they had telephoned me.
Now in the good old days these Executors could have taken their papers and the form to the Tax Office and had help completing the form on the spot. Nowadays, even if they could find the person who penned the red crosses, he probably would not have had a clue either, which is why after a couple of months he returned the form with such an unhelpful letter.
I reckoned the repayment due to the estate was less than £100, but the couple had not collected all the information needed to fill in the R27. I dictated letters to the organisations concerned, which the wife took down in shorthand, and said that when they had received replies they would be able to complete the form and send it off. If they were still unsure they should call me.
I came away feeling unable to bill for my 45 minutes plus the short drive. I had done the tedious Money Laundering check because that is obligatory but by the time I had done an engagement letter, written the letters myself and dealt with HMRC I would have done far more work and costs would have far exceeded the refund due to the very small estate. Effectively I had to treat it as charity work.
HMRC calls taxpayers customers, but customer service has become an alien concept. When I was a young tax junior you could track down anyone in the Revenue and get things sorted out over the telephone, which is no longer possible with the call centres.
Why should I have to do for nothing something HMRC cannot be bothered to do because it has changed itself into an even less friendly organisation than BT or my bank? Yes, those who cannot afford to pay for representation can go to TaxAid, but why should they have to, and though I am happy to help out, I think we tax advisers and agents are taken for granted and not afforded proper respect by HMRC. However, if they treat their customers like that, what do I expect?
© Jon Stow 2009
Saturday, 1 August 2009
Stirring the pot
I watched with interest the interview on the Accountancy Age website with Dave Hartnett, Permanent Secretary for Tax about the New Disclosure Opportunity (NDO). To quote HMRC,
“the NDO will allow people with unpaid taxes linked to offshore accounts or assets to settle their tax liabilities at a favourable penalty rate. It will run from the 1st Sept 2009 until 12 March 2010.
If you have unpaid tax linked to an offshore account or asset to declare, to benefit from the terms of NDO you will need to notify us AND disclose (tell us the details, calculate the amount due and make a full payment) within a set time limit.”
There will be a specific lowered rate of penalty for those coming forward under the scheme. It is not an amnesty in that tax, interest and penalties will have to be paid; it is simply that the penalty will be fixed at 10% unless people had a letter from HM Revenue & Customs under the original Disclosure Opportunity and passed it up, in which case the penalty will be 20%.
The original opportunity for those with undeclared and taxable offshore income to come forward was in 2007. This followed legal action through which British banks holding their customers' money offshore were effectively obliged to disclose details of the relevant accounts as they have done for many years in respect of UK based accounts. HMRC wrote to the bank customers they thought might have undeclared accounts. This time round, HMRC will write to many more people since they have information from many more banks.
In the interview, Mr. Hartnett admitted that he had no idea of the number of people would come forward or the amount of money which would be recovered. This was an honest reply. We only gleaned that he thought it would be more than under the previous scheme. Pressed on the criticism that the earlier campaign was under-publicised he said that around £1M would probably be spent in advertising and initiatives. I wish HMRC luck with this trawl and will have no sympathy with those continue to evade tax. I will be happy to assist anyone who wishes to come clean.
The NDO is not the only trawl in which HMRC is currently engaged. Many possibly non-tax payers or marginal taxpayers will have received letters in the last couple of weeks asking whether they should still be receiving their bank interest without deduction of tax.
Those recipients I know about actually receive their interest net of tax (and pretty paltry interest it is at current rates), but although some have been happy just to refer the printed note to me, one very elderly lady became convinced HMRC were after her and would take away her pension. That second reaction was extreme, but I cannot help thinking that the distress caused be this second mailshot to people on low incomes will far outweigh the concern of the generally much wealthier recipients of the NDO letter. I am not sure anyone in HMRC will have thought about that and I am sceptical that any significant tax will be raised by this mailshot to the poor and elderly.
© Jon Stow 2009
“the NDO will allow people with unpaid taxes linked to offshore accounts or assets to settle their tax liabilities at a favourable penalty rate. It will run from the 1st Sept 2009 until 12 March 2010.
If you have unpaid tax linked to an offshore account or asset to declare, to benefit from the terms of NDO you will need to notify us AND disclose (tell us the details, calculate the amount due and make a full payment) within a set time limit.”
There will be a specific lowered rate of penalty for those coming forward under the scheme. It is not an amnesty in that tax, interest and penalties will have to be paid; it is simply that the penalty will be fixed at 10% unless people had a letter from HM Revenue & Customs under the original Disclosure Opportunity and passed it up, in which case the penalty will be 20%.
The original opportunity for those with undeclared and taxable offshore income to come forward was in 2007. This followed legal action through which British banks holding their customers' money offshore were effectively obliged to disclose details of the relevant accounts as they have done for many years in respect of UK based accounts. HMRC wrote to the bank customers they thought might have undeclared accounts. This time round, HMRC will write to many more people since they have information from many more banks.
In the interview, Mr. Hartnett admitted that he had no idea of the number of people would come forward or the amount of money which would be recovered. This was an honest reply. We only gleaned that he thought it would be more than under the previous scheme. Pressed on the criticism that the earlier campaign was under-publicised he said that around £1M would probably be spent in advertising and initiatives. I wish HMRC luck with this trawl and will have no sympathy with those continue to evade tax. I will be happy to assist anyone who wishes to come clean.
The NDO is not the only trawl in which HMRC is currently engaged. Many possibly non-tax payers or marginal taxpayers will have received letters in the last couple of weeks asking whether they should still be receiving their bank interest without deduction of tax.
Those recipients I know about actually receive their interest net of tax (and pretty paltry interest it is at current rates), but although some have been happy just to refer the printed note to me, one very elderly lady became convinced HMRC were after her and would take away her pension. That second reaction was extreme, but I cannot help thinking that the distress caused be this second mailshot to people on low incomes will far outweigh the concern of the generally much wealthier recipients of the NDO letter. I am not sure anyone in HMRC will have thought about that and I am sceptical that any significant tax will be raised by this mailshot to the poor and elderly.
© Jon Stow 2009
Saturday, 18 July 2009
Is "progress" disenfranchising the non-technical population?
A couple of incidents recently highlighted have highlighted how easily “progress” can isolate people and prevent them from getting help, and those people are often the neediest.
As a tax professional I am used to the bureaucracy of HM Revenue & Customs, though even for me it can be extremely frustrating. I received a form from HMRC concerning a pensions coding (Form P161 for the initiated). It was addressed to my firm, but did not have the taxpayer-client’s name on it, only the National Insurance number. I could not trace the number in my tax software and telephoned HMRC to find out whose form it was. However, having given the number to the call centre person, she told me I could not discuss the client unless I knew his / her name, but that was what I was calling to ask. She recommended that I sent the form back with an explanation and waited for them to respond by post. However, I knew that the Tax Office in question was months behind with paper correspondence, but even so, there was nothing to be done but to ring off.
Such an intransigent attitude and inability to take the initiative and work around to solve the problem quickly would deter any individual taxpayer trying to understand a confusing form. I can well imagine it would be intimidating. In the good old days…..etc.
The second incident started when one of my very elderly clients telephoned to say she had received a form she had to fill in to get the refund I had recently applied for on her behalf for 2008-09. I was puzzled, but asked her to send me the form to look at. It turned out that the form was actually for next year’s claim – a Form R40 for 2009-10 for the initiated. These elderly people, often on very low incomes and who are on low fees – my few “charity cases”- have no idea how to obtain even the most basis information or understand their entitlements. Just dishing out a form, which would have been best sent to me as agent anyway, is no form of proper communication. I have tried hard to get as much of these people’s investment income paid without deduction of tax so they do not have to get me to reclaim tax, but to no avail. Life would also be simpler if HMRC were to have the option to deduct PAYE from the State Pension, as they have in respect of most pension annuities these days, because fewer elderly people would need to complete tax returns and claims. The only thing is that they like their hands held over all sorts of financial matters even if it is helping them to find a good IFA, so to a degree I am a sort of financial social worker and some would rather pay me a little something so that I am available at the end of a telephone. I would do some stuff for free for a few if I thought I would be insured for it.
Still, I am in business in order to make a living. I do charge realistic and suitable fees to a majority of clients for the excellent service they get. The good news is that having searched my archived records on a whim I found the former client to whom the pension coding form related. I telephoned to ask if he wanted me to send it on and it turns out he would like me to act for him again due to a change of circumstances. All in all that was good news, but I just wish that the workings of government bureaucracy were simpler for the more senior citizens and for those who are not comfortable sitting at a keyboard and monitor.
© Jon Stow 2009
As a tax professional I am used to the bureaucracy of HM Revenue & Customs, though even for me it can be extremely frustrating. I received a form from HMRC concerning a pensions coding (Form P161 for the initiated). It was addressed to my firm, but did not have the taxpayer-client’s name on it, only the National Insurance number. I could not trace the number in my tax software and telephoned HMRC to find out whose form it was. However, having given the number to the call centre person, she told me I could not discuss the client unless I knew his / her name, but that was what I was calling to ask. She recommended that I sent the form back with an explanation and waited for them to respond by post. However, I knew that the Tax Office in question was months behind with paper correspondence, but even so, there was nothing to be done but to ring off.
Such an intransigent attitude and inability to take the initiative and work around to solve the problem quickly would deter any individual taxpayer trying to understand a confusing form. I can well imagine it would be intimidating. In the good old days…..etc.
The second incident started when one of my very elderly clients telephoned to say she had received a form she had to fill in to get the refund I had recently applied for on her behalf for 2008-09. I was puzzled, but asked her to send me the form to look at. It turned out that the form was actually for next year’s claim – a Form R40 for 2009-10 for the initiated. These elderly people, often on very low incomes and who are on low fees – my few “charity cases”- have no idea how to obtain even the most basis information or understand their entitlements. Just dishing out a form, which would have been best sent to me as agent anyway, is no form of proper communication. I have tried hard to get as much of these people’s investment income paid without deduction of tax so they do not have to get me to reclaim tax, but to no avail. Life would also be simpler if HMRC were to have the option to deduct PAYE from the State Pension, as they have in respect of most pension annuities these days, because fewer elderly people would need to complete tax returns and claims. The only thing is that they like their hands held over all sorts of financial matters even if it is helping them to find a good IFA, so to a degree I am a sort of financial social worker and some would rather pay me a little something so that I am available at the end of a telephone. I would do some stuff for free for a few if I thought I would be insured for it.
Still, I am in business in order to make a living. I do charge realistic and suitable fees to a majority of clients for the excellent service they get. The good news is that having searched my archived records on a whim I found the former client to whom the pension coding form related. I telephoned to ask if he wanted me to send it on and it turns out he would like me to act for him again due to a change of circumstances. All in all that was good news, but I just wish that the workings of government bureaucracy were simpler for the more senior citizens and for those who are not comfortable sitting at a keyboard and monitor.
© Jon Stow 2009
Friday, 10 July 2009
A week of curiosities and a valuable reminder
It has been a strange week. On Monday I went to see a client to collect his tax papers, only to find that they were in a locked cabinet to which only his wife had the key, and she was out. It was a short meeting as a result, and I did wonder why my client had not telephoned to save me the journey.
Two less eventful days ensued, and I went to my monthly local meeting of tax practitioners on Thursday. “Tell me, everyone” I said, “what do you guys do in the way of marketing?” Six faces looked back at me blankly. “Marketing? We don’t do marketing. We don’t need to because we always have enough to do.”
I was amazed, and actually even felt a little foolish for a moment. After all, I spend quite a lot of time marketing. I have one local targeted ad, and apart from that I work on my website, my blogs, the social networking sites, Twitter and face-to-face networking. All this results in work coming in, which compensates for the occasional client of mine who finds it necessary to dispense with my services. There is always some attrition. When people leave me it never seems to be because they have gone off my firm or its service. People move and like someone local to look after their tax affairs, or they sell up everything and move abroad.
How do my colleagues not have net losses of clients? It can only be because they are longer established than me (a mere seven years) and get plenty of referrals without looking for work, or they are good at client stickiness and find it easy to keep their revenue from each increasing year on year. I admire that, and am even envious though I worry about their complacency. Apparently any sort of networking is alien to their natures. I enjoy it and it gets me out, gives me a chance to feel useful in connecting people, gets me work and avoids the loneliness of some small business owners.
I went back to the office to puzzle over an email from a client’s wife. “I haven’t time to send you my husband’s papers so that you can do his tax return as we are going on holiday for the whole of August and we need his refund by September”. Now, hang on, she lives a long way from my office and I cannot easily take the ferry to do my customary house visit, but we have broadband and live in an electronic age; hence the email. Said lady then goes on to ask me how to fill in the Return by requesting a technical calculation for last year. I answered her question of course, and wish her the best of British with the Foreign and Non-resident pages which are hardly logical even to us professionals (we always seem to have to do work-arounds to get them to make sense). I have not had a response to my somewhat injured one, but am not holding my breath. Needless to say I advised her that if she sent me the information she could have emailed copies of the Return and accounts for approval easily by the end of July. It would be inconvenient but I will always try to be flexible to meet my clients’ needs. I am not holding my breath, though.
Late on Thursday, I saw another new client for the first time. It turned out his previous adviser had died, and no one seemed to be running the practice now. I think the accountant was unqualified but nevertheless may have been very good at what he did. The client had obviously found his service good. In these tragic circumstances it is a reminder that we should always allow for someone to take over the reins of our business if we become sick or die suddenly as this guy did as a result of an accident. We owe it to our clients and also to our families as it is better to have a saleable business as a going concern than a business which is as dead as the owner.
If not lessons, I feel I have had some useful reminders. I must check that my nominated successor is still happy to run my practice in the event of my incapacity as I have directed. I will call her to check.
Two less eventful days ensued, and I went to my monthly local meeting of tax practitioners on Thursday. “Tell me, everyone” I said, “what do you guys do in the way of marketing?” Six faces looked back at me blankly. “Marketing? We don’t do marketing. We don’t need to because we always have enough to do.”
I was amazed, and actually even felt a little foolish for a moment. After all, I spend quite a lot of time marketing. I have one local targeted ad, and apart from that I work on my website, my blogs, the social networking sites, Twitter and face-to-face networking. All this results in work coming in, which compensates for the occasional client of mine who finds it necessary to dispense with my services. There is always some attrition. When people leave me it never seems to be because they have gone off my firm or its service. People move and like someone local to look after their tax affairs, or they sell up everything and move abroad.
How do my colleagues not have net losses of clients? It can only be because they are longer established than me (a mere seven years) and get plenty of referrals without looking for work, or they are good at client stickiness and find it easy to keep their revenue from each increasing year on year. I admire that, and am even envious though I worry about their complacency. Apparently any sort of networking is alien to their natures. I enjoy it and it gets me out, gives me a chance to feel useful in connecting people, gets me work and avoids the loneliness of some small business owners.
I went back to the office to puzzle over an email from a client’s wife. “I haven’t time to send you my husband’s papers so that you can do his tax return as we are going on holiday for the whole of August and we need his refund by September”. Now, hang on, she lives a long way from my office and I cannot easily take the ferry to do my customary house visit, but we have broadband and live in an electronic age; hence the email. Said lady then goes on to ask me how to fill in the Return by requesting a technical calculation for last year. I answered her question of course, and wish her the best of British with the Foreign and Non-resident pages which are hardly logical even to us professionals (we always seem to have to do work-arounds to get them to make sense). I have not had a response to my somewhat injured one, but am not holding my breath. Needless to say I advised her that if she sent me the information she could have emailed copies of the Return and accounts for approval easily by the end of July. It would be inconvenient but I will always try to be flexible to meet my clients’ needs. I am not holding my breath, though.
Late on Thursday, I saw another new client for the first time. It turned out his previous adviser had died, and no one seemed to be running the practice now. I think the accountant was unqualified but nevertheless may have been very good at what he did. The client had obviously found his service good. In these tragic circumstances it is a reminder that we should always allow for someone to take over the reins of our business if we become sick or die suddenly as this guy did as a result of an accident. We owe it to our clients and also to our families as it is better to have a saleable business as a going concern than a business which is as dead as the owner.
If not lessons, I feel I have had some useful reminders. I must check that my nominated successor is still happy to run my practice in the event of my incapacity as I have directed. I will call her to check.
Wednesday, 8 July 2009
Out with the old…
Like most other people in my business, nearly all things in my office are done online. The tax returns have to be submitted by FBI (file by internet); we can read the Revenue manuals online, download their booklets, read the professional magazines and have website communities of fellow professionals. In other words, we have access to every possible resource of information without resorting to the printed word. Then, if we need something printed, then we print it ourselves,
Many readers of this piece will recognise this; some will be fellow tax professionals and others will have found their business lives completely changed or based from the start on information technology.
This leaves me with a problem though. I have sets of the bibles of UK direct tax, Simon’s Taxes, and of the more recent indirect tax regime, De Voil. They constitute a very large number of loose leaf volumes of many pages in plastic covers and they have not been updated for six or seven years. Actually I had them as hand-me-downs when I started out on my own. They were surplus to requirements from an office that was closing. I could not have afforded to pay for the updates, and although some case law commentaries might still be relevant, the legislation has changed so much especially with the on-the-hoof goal-post moving of recent times. I hope that is not a surfeit of metaphors.
The books have to go. I need the space and have to think what to do. Are they of any interest to anyone? Shall I take them down the tip, take the pages out of the covers and recycle the component parts. Can I sell them on EBay – six years out of date? I guess the tip is odds-on favourite. Any offers – free to a good home?
Many readers of this piece will recognise this; some will be fellow tax professionals and others will have found their business lives completely changed or based from the start on information technology.
This leaves me with a problem though. I have sets of the bibles of UK direct tax, Simon’s Taxes, and of the more recent indirect tax regime, De Voil. They constitute a very large number of loose leaf volumes of many pages in plastic covers and they have not been updated for six or seven years. Actually I had them as hand-me-downs when I started out on my own. They were surplus to requirements from an office that was closing. I could not have afforded to pay for the updates, and although some case law commentaries might still be relevant, the legislation has changed so much especially with the on-the-hoof goal-post moving of recent times. I hope that is not a surfeit of metaphors.
The books have to go. I need the space and have to think what to do. Are they of any interest to anyone? Shall I take them down the tip, take the pages out of the covers and recycle the component parts. Can I sell them on EBay – six years out of date? I guess the tip is odds-on favourite. Any offers – free to a good home?
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