Sorting out the taxman

I ’m proud to own and manage one of the IFA’s larger practices. But of the nearly 1,000 clients, who do you think is (effectively) my largest client?

It’s HM Revenue & Customs. We collect tens of thousands of pounds a year in fees generated from handling complaints from our direct clients about problems and errors made by the taxman.

My firm has found that they’re inefficient, demoralised and their systems don’t seem to work particularly well. Pleading for help is unlikely to get you a response for several months, so the only way to get things done is to register a complaint. 

As a practice we earn money by charging for our time. It’s not our job to sort out HMRC mistakes for free. Of course, it’s not the clients’ fault or responsibility either – but they have been happy to pay fees to sort out these problems – over the years some 97% of our complaints have been upheld. This means you get a happy client who has been fully reimbursed, and we have been paid correctly for our time and effort.

HMRC doesn’t exactly advertise its complaints procedure; it’s tough to go through, but we feel we’re supporting our clients in taking up the mantle. We hear of other practices swallowing the cost themselves or ignoring the issue and leaving it to the client – that’s not how professionals should work. 

There’s recently been a lot of work due to discrepancies in the new MTD system – for example, with one client not having their direct debit moved across onto his new account properly. We’ve now asked for details for the last 12 months’ VAT returns and payments only to be sent about seven years information up to March 2019 and excuses that they could not provide anything else due to MTD. We’re pushing HMRC for the information and the client is more than satisfied we’re dealing with it.

We have a normal mix of clients and sole traders through to SMEs – nothing out of the ordinary. But this is part of our ‘financial director’ service to them all, regardless of size or sector.

When a problem arises, we roll up our sleeves and help to sort it. Some might say it’s a shame we’re not spending our time and expertise giving more proactive business and accounting advice, rather than sorting out their problems with HMRC.

But they are busy people who need to focus on growing their business, so this is part of helping them grow. And until HMRC gets to a level of efficiency that they know what they’re dealing with, then if you don’t look after the clients with these problems, they won’t listen to anything more proactive.

In other words, providing this type of ‘defensive’ support makes them become a lot more receptive to other types of advice – forward-looking and financial. Without these problems we would have more problems as a lot of clients then would not be talking to us. Now that they see the benefits of communication and how we can fully assist, we receive much more, and regular, contact.

Quite often they’re amazed that we’ll deal with it and then work with them and support them. Some accountants just won’t go the extra mile for clients. Our team are all conversant with these procedures and all join in this very important service. We’re proud of what we do.

This form of nursing clients through tax problems has helped us at LAS represent them. We are passionate about it. We should all be fighting for our clients. If we all did, HMRC might do something about it.

Tim Howard is owner of LAS Partnership and an IFA fellow