How Does Tax Outsourcing Work? 5-Point Guide to Decode the Process

Many accountants in the UK rely on tax outsourcing to deal with the stress of the busy Self Assessment season. Over the last few years, the practice has become widely common owing to its numerous benefits to accountants.

To begin with, outsourcing is one of the easiest ways for accountants to hire skilled resources in the midst of the ongoing talent crisis. It is also an excellent method to save costs and reduce overheads, thus making it a profitable choice for accountants.

But what exactly does it mean to outsource tax preparation and how is it done? Once an accountant outsources tax preparation, how does the outsourcing company go about the process?

These are some common questions that novice accountants and first-time outsourcers often ask. Let’s understand the process of outsourcing tax preparation in detail.

Tax Outsourcing: An Accountant’s To-Dos

Research

As an accountant, your first responsibility when outsourcing taxation services is to find a reliable service provider. Conduct adequate research and due diligence to identify the most suitable outsourcing partner for your firm.

Research includes everything from market study to competitor analysis, collecting reviews, background checks, due diligence, and much more. Your firm’s reputation and success largely depend on the firm you outsource to.

Candidate Selection

After selecting the right firm for tax return preparation outsourcing, the latter shares the profiles of their most suitable candidates. As an accountant, you have complete liberty to choose the candidate you deem right for your firm. Interview multiple candidates and assess their skills and experience in order to make the right choice.

Agreement

This is one of the most important steps in outsourcing. Once you have shortlisted candidates, the outsourcing company drafts a Service Level Agreement (SLA). This is the foundation of the outsourcing association and both parties must sign it mutually.

Onboarding

The final responsibility of accountants in the tax outsourcing process is to onboard their offshore team effectively. This sets a strong foundation for them to begin their work and also strengthens your relationship with your outsourcing provider.

The Process of Tax Outsourcing: How Does it Work?

As an accountant, you have chosen the right firm to outsource to and onboarded your offshore team. What next? What should you expect from your outsourcing provider? How does the tax outsourcing process actually work?

Here’s a step-by-step account of how an outsourcing provider goes about the process.

Step 1: Secure login

Using secure virtual technology, your offshore tax team logs into your client’s system. This is done remotely, following all the necessary data security and information protection protocols.

This is where your outsourcing provider’s data security compliance comes into the picture. Before you choose an outsourcing partner for your firm, assess their data security standards and seek reviews from past clients, if feasible. How a firm handles your client’s data speaks a lot about its credibility and reliability.

Step 2: Tax return preparation

Your offshore tax preparation team accesses your client’s details on a secure server and processes the data. Based on the information provided, outsourced tax professionals prepare your client’s tax return.

This is where your outsourced staff’s experience and expertise come into the picture. When you outsource tax preparation to a reliable outsourcing company, you can be assured of top-notch services. The staff employed by these firms are highly professional and well-trained in the latest UK tax legislation, facilitating 100% productivity and efficiency.

Step 3: Review & approval

The next step in the tax return preparation outsourcing process is review. Once the tax return is prepared, the outsourced team shares the same with clients for review and requests their feedback, if any.

Step 4: Changes implementation

Based on the feedback received from the client, the offshore tax team implements the necessary changes. The file is once again shared with the client for review and final assessment.

Step 5: Final file sharing

Once the job is confirmed and the client approves the tax return, the offshore tax outsourcing team shares a final file with review notes.

The turnaround time in outsourcing depends on the complexity of your clients’ tax returns. Leading tax outsourcing companies offer a turnaround time of 24 to 48 hours based on the nature of the tax preparation request.

Things to Remember When Outsourcing Taxation Services

While outsourcing tax preparation is a profitable decision for accountants, it must be done right. Clients now expect more from accountants beyond just tax preparation and filing. For instance, many clients also look for advisory services along with tax preparation.

Besides, since tax preparation deals with your clients’ critical financial data, there is no scope for error. To err is to have your client pay penalties to the HMRC, which can make them lose trust in your services. Therefore, outsourcing taxation services to the right outsourcing partner is more critical than you think.

Here are a few things accountants must remember while outsourcing tax services.

• Outsourcing is a two-way process. As much as your outsourcing partner is responsible for its success, how well you onboard, communicate and coordinate with your offshore team matters.
• Accountants must be vigilant when choosing a tax outsourcing partner. Instead of simply focusing on cheaper services, accountants must consider a firm’s industry experience, background, reviews, etc.
• Communication is a vital component of outsourcing. In order to make the most out of your outsourcing partnership, ensure you regularly communicate with your offshore team and provide feedback about their work.

Are You Prepared to Outsource Tax Preparation Services?

Whether you are experiencing a staff shortage or looking to cut your firm’s costs, outsourcing is the solution you need. If you are looking for a reliable firm to outsource tax preparation services, your search ends at QXAS.

QXAS is a leading accounting outsourcing company specialising in personal tax preparation outsourcing. We have a rich experience of over 19 years in helping accountants scale their firms and achieve profits through outsourcing.

We have a unique commitment to TAXellence, helping accountants ward off the Self Assessment season stress and burnout. With QXAS, you will never fall short of experienced tax professionals skilled in the latest UK tax legislation.

Below are a few reasons why you must choose to outsource with QXAS.

• Vast team of highly experienced tax professionals
• Exclusive turnaround time of 24 to 48 hours
• 100% accuracy and dedicated support
• Instant capacity creation for your firm
• Customised pricing and services to suit your requirements

For an effortless tax season, book a free consultation with our outsourcing expert today. To explore more of our services, call +44 208-146-0808 or drop an email at [email protected].