Topics: Growth, Outsourcing, practice strategy, tax season


An Accountant’s Guide to Creating Your Firm’s Self Assessment Tax Return Outsourcing Strategy

Written By Rishmita Aich

Filing tax returns is a resource-intensive process that demands a lot of time and effort. In addition to time-crunch and burgeoning workload, there is skills shortage in the UK which has reached critical levels now. If not handled promptly, it will result in a progressive deterioration of quality of services and even, missing self assessment tax return deadline.

The usual norm is that the tax season is excruciatingly busy and hectic for accountants. It’s the time when they work fingers to the bone making sure that their clients meet all the tax deadlines. However, the scale of difficulty is even higher this time. In this article, we will talk about the reasons why this tax season is different, the struggles of an accountant and an effective self assessment tax return outsourcing strategy that will help you navigate through this tax season smoothly.

self assessment tax return outsourcing

Creating Your Firm’s Self Assessment Tax Return Outsourcing Strategy

Before hiring an outsourcing company to outsource tax returns, accountants must have a well-defined strategy that helps them reap maximum benefits from the association.

Here’s an outsourcing strategy that you must follow:

Research and find the most suitable outsourcing company

Your process must begin with a background check and asking peers for references. Make a list of some self assessment tax return outsourcing companies and start interviewing them. Check their infrastructure, staffing and technological capabilities. Narrow down to the one that ticks all the boxes in your list and is GDPR compliant. Even better, work with someone who is professionally affiliated to bodies such as the ACCA or ICAEW.

Identify the number of tax clients. Measure it against your firm’s handling capacity

To manage the outsourcing plan effectively, consider how much time you have, the number of clients and the workforce available to file those tax returns. Once the workload has been identified, you can choose how to divide that number between the in-house team and the offshore team.

A simpler way will be –  outsourcing all the tax returns. Your in-house accountants can utilise the freed up time to learn more about financial business advisory services, upskill, learn new technology and thus explore more revenue streams without adding to the overheads.

Check the scope of work and contact the outsourcing partner

Before kickstarting the collaboration, you must check if your requirements align with the scope of the outsourcing firm. You can choose to select the entire set of tax functions or selectively go for a few like tax self-assessment for individuals and partnerships, tax summary for individuals, property schedules, etc.

Choose the engagement and pricing model

There are three modes of co-sourcing to meets each client’s specific needs. They are:

  • Working remotely: involves using secure virtual technology like VPN /Citrix/GoToMyPC/RDP. An offshore team will log into your system and file the tax returns.
  • Working on the cloud: To work on the cloud ecosystem, provide your offshore team with the login details. If you still have to share any other supporting documents, pass them on to your offshoring partner through the secure FTP portal.
  • Working on a secure server: All documents are scanned and collected in a secure FTP portal. They are processed and delivered back.

Coming to the pricing, there are two models to choose from. One is Fixed Fees, the other is Variable Fee. Under the fixed fee model, you pay £75 per tax return. For the latter, you pay as per the number of income streams. There are further volume-based discounts available in both models.

Provide the necessary information and set a deadline

You must have a knowledge transfer session with your outsourcing partner. Discuss the tax projects you are managing currently or better yet, fill in a checklist. Once you have answered all the important questions, share your existing process with the outsourcing team.

Tell them about the software you want them to use, the reports (like tax computation report, SA 800, SA 100, etc.) you want them to provide and set a deadline.

Once an appropriate model is chosen, the outsourcing team will allocate the required resources.

The Self Assessment Tax Return Outsourcing Process

Here’s a 6-step process that tax outsource company in India follow:
Scanning and uploading documents on FTP server
• Recording the data and processing it
• Finishing the task
• Review and feedback
• Implementing changes as per feedback
• Providing a final pdf report of the tax return

Be in touch throughout the process

Ensure that you stay connected with your outsourcing partner through the entire process. Earlier, it was not an easy task but today some outsourcing firms have apps that allow the client to review the work from any corner of the world. For example, the  QXAS Job Tracker mobile app allows accountants to see task progress, raise queries, etc.

How will self assessment tax return outsourcing benefit your accounting firm?

According to AccountancyAge, 67% of accountants are all set to outsource services to remain competitive.

In an age where the role of an accountant is not limited to just filing tax returns, accountants need to do more in a limited period of time. Outsourcing becomes the key in managing this excessive workload during tax season.

Here’s why you must have a tax returns outsourcing strategy for tax season 2020:

Evolving Tax Trends

1st April 2019, new digital tax initiative (MTD) and it was a massive change for businesses. UK accountants spent their entire year working with clients to helping them get prepared for Making Tax Digital.

Many such developments are on the horizon and to integrate them well in the client’s business ecosystem, accountants must be well-acquainted with them. With tax outsourced with an offshore client, you focus on ‘what’s next?’ rather the mundane, compliance-driven tasks.

Coping with the New Normal

Businesses are facing difficulties in maintaining their cashflows and generating revenues. They don’t need assistance with their tax returns only but also managing their businesses. If your accounting firm outsources, you will be able to take on more work, evolve their service offerings and become the advisors they’ve always wanted.

You can focus on advising your clients on several areas such as legal, technology and on any business changes that are needed for a better future.

Deeper insights to Enable Data-driven Strategies

For tax compliance, data-accuracy is utmost important, and tax preparation outsourcing helps prepare more taxes, accurately. Accurate data enables you to analyse the numbers and interpret them. It will allow you to provide more value to your clients by offering business advisory services.

Also, the expanded service portfolio helps to attract more clients.

Way forward

We hope this guide helps accountants in creating a self assessment tax return outsourcing strategy for the tax season and helps their firm with better productivity and more profitability. On the different note, accountants mustn’t think that outsourcing is just a temporary solution but helps their firm grow in the long run. An accountant must consider making outsourcing an indispensable part of their firm’s workflow. It helps to expand your clientele and grow your practice, without having to worry about the size of the workforce.

In a competition-driven economy, self assessment tax return outsourcing helps to stay a step ahead with strategic support and streamlined processes delivered by an outsourcing partner. If you have any queries about tax outsourcing, feel free to reach out to our tax experts at [email protected] or call +44 208 146 0808.

ABOUT Rishmita Aich

As a Journalist turned Marketer, Rishmita has developed a unique perspective when it comes to analysing & covering the changing landscape of the accounting industry. Influenced by Andrew Sorkin and Stephanie Flanders, she aspires to deliver souhgt-after advice, fresh updates & detailed analysis of HMRC legislations through her work for accounting practices to make better, informed decisions. She has spent the last 3 years creating insightful content for accountants, and is currently most passionate about the work she is doing to educate accountants about outsourcing. More Posts(23)  

Originally published Sep 20, 2021 10:09:53, updated September 20 2021

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