Do you know how much the UK Government collected from income tax and VAT in 2019-2020?
The figure was £ 329 bn.
Accounting firms are at the forefront of helping businesses and individuals prepare their tax returns, which even at the best of times is a complex process, especially for businesses. No surprises then that tax consultation is a £ 5 bn market in the UK and growing year on year. Tax preparation and advisory services are a huge revenue generation stream for most accounting firms, and many of them cater to their ever-increasing workload with the help of tax preparation outsourcing to India
What's New in the New Normal?
We are all well aware of how COVID-19 has destroyed world economy including that of the UK. This has also significantly impacted taxation as there are many new complexities that have entered the taxation mix. Couple that with the numerous financial schemes launched by the UK Government to save jobs and businesses and you have a scenario wherein your firm will have to keep itself updated with all schemes and their working, if you are to provide advisory services. This is a challenging ask and an answer lies in outsourcing these services or your regular accounting tasks such as corporate tax preparation.
In the new normal, you will need to ensure business continuity and also grow your business. Otherwise the sheer weight of the economic downturn might force you to shut shop. Your firm needs to leverage all opportunities coming its way, and this is only possible if you are able to maximize deliverables from your existing team of accountants and also extend your capabilities to handle more work, but without adding substantially to your overheads.
Between Managing the Baby, the Zoom Meetings & the Tax Returns
Yet, another challenge faced by accounting firms is that a large percentage (or probably the whole team) of their team is working remotely. Remote working is not as easy as it seems, especially if your team doesn’t have a lot of experience in handling work responsibilities without coming to the office.
The question isn’t only whether they are capable of working remotely or not. The question is whether they have the setup to work from home. Has your accounting firm invested in technology that can allow its accountants to take care of all accounting tasks remotely? Even in cases where the technology is in place, it takes time to fit into the ‘remote mould’. Some members of your team, might be facing difficulties to adjust to the remote work model. This can impact productivity, which in turn can impact you firm’s ability to take on more work. The answer lies in outsourcing certain activities. E.g. you can outsource tax returns, to take some burden off the shoulders of your team.
By taking some pressure off your remote team, you have a chance to involve them in more strategic activities and explore new revenue generation streams. You are also giving them the time needed to adjust to their new work environment. This can also improve their performance in the long run and help them stay motivated. 75% of UK accountants had already been suffering from work related stress, and COVID-19 and the related work challenges, might have put them under even more stress.
But, choosing tax preparation outsourcing is not just about unburdening your team. You are also getting an opportunity to extend your capabilities, which is a must in these challenging times. Think of a scenario wherein your team has its hands full on preparing taxes, which means, your firm has to say no to all the advisory work that is coming your way. You are forced to say no to a potentially lucrative revenue stream.
With UK tax return outsourcing, you can go ahead and say yes to a lot of new work coming your way.
The Complexities with Taxation This Year
COVID-19 has driven the UK government to launch plenty of new schemes that helps businesses stay afloat. These schemes include CBILS (Coronavirus Business Loan Interruption Scheme), CJRS (Coronavirus Job Retention Scheme), SEIS (Self-Employment Income Support Scheme), CCFF (COVID-19 Corporate Financing Facility), SSP (Statutory Sick Pay Rebate), VAT Deferral and many more. As can be imagined, these schemes have a direct impact on tax preparation. As if tax preparation services were not challenging enough, accountants have a new challenge on their hands. They have to get a drill-down understanding of these schemes and how they impact businesses and individuals from a tax perspective.
E.g. According to KPMG, business with VAT payment due between March 2020 and 30th June 2020 have the option of deferring the VAT payment. Even income tax payments can be deferred to January 2021 .
Also, businesses who are taking advantage of the schemes launched by the government will need to show how the subsidies they are getting are being accounted for, as this will impact their corporate tax.
These are just some aspects wherein accountants are going to face difficulties while preparing taxes. This means there is a learning curve involved to understand the new tax intricacies. What’s more, the time taken to prepare taxes will go up as these newer aspects come into play. By choosing tax return outsourcing India, your firm can speed up this process, by either outsourcing all tax preparation or just personal tax returns outsourcing or just corporate tax preparation.
But the question uppermost in your minds will be – will a services provider offering tax outsourcing have the expertise to handle the new tax challenges, especially those that are UK specific? The answer lies in choosing the services of a company that has accountants with a proven track-record of working on UK accounting projects and who undergo a continuous process of learning and development. This ensures they are up-to-speed with the latest changes in UK taxation and can implement these in your tax projects.
Not Just Outsourcing
By working with a reputed tax preparation company in UK offering outsourcing services, you are getting more than just the benefit of improved productivity without substantially adding to your overheads. This is a huge benefit in itself. But, the best outsourcing companies, do not limit themselves to purely handling outsourced jobs. They also specialize in offering consulting services that will help you improving existing accounting processes.
There are a lot of things that your firm must be doing right, but there can also be plenty of ways you can improve existing current accounting processes to help your firm become even more competitive. This is where consulting comes into play. A thorough process audit conducts a SWOT analysis of your accounting processes to identify weakness and opportunities. This results in the kind of process improvements that can see your remote team being able to handle more work, more efficiently and without burdening themselves excessively.
Plan Ahead with A Strategic Partner
If you think of tax preparation outsourcing to India, purely from outsourcing terms, you will be missing an important benefit. What you need to do is think of outsourcing from a very strategic perspective. The question in the new normal is – How do you build new accounting capabilities without adding to your workforce? Hiring new employees will add to your expenses, a liberty you won’t have currently. But you still don’t want to miss out on all the new accounting work that is a direct outcome of the new challenges business are facing during these times.
It’s all about improving your ROI and profitability, without incurring costs that you can ill afford. But, for that to happen you have to think strategically. By all means, choose a tax outsource company in India, but make sure that the company, is able to bring a lot of other benefits to the table. And, think long term. The post-COVID 19 taxation challenges might get replaced with newer challenges moving forward. Ask yourself this question – can your outsourcing partner evolve to offers solutions for newer challenges and can this partner scale to meet the growing needs of your accounting firm?
The answer to both these questions must be in the affirmative.
Your Firm Must Adjust to the New Normal
The changes your firm makes is just one part of how your firm needs to seamlessly fit into the new normal. Yes, self-assessment return outsourcing will help by a long way, but what you also need to do is rework your processes. You need to be flexible enough in your outlook to understand that it is not business as usual. You need to look for new ways to make your firm more profitable. You also need to look for new ways to make your remote accountants even more productive, without putting too much of a pressure on them. This will involve taking help of technology and also motivating them towards pursuing their goals in a difficult scenario. It requires a multipronged approach
The new tax season will be full of newer complexities. It is imperative that you don’t think of it as a passing phase, because there is a reason why we are calling it ‘the new normal’. It is because things will continue in this fashion for a long time to come. So, prepare yourself for becoming a part of this new normal, especially when it comes to the tax season. It will be easier for you if you take the help of tax return outsourcing to India.
My name is Vishal Kurani, the author of the QXAS blog and I appreciate you stopping by! I help accountants gain Accounts Outsourcing knowledge through my easy to follow blogs and guides. Download my free guide "The Accountants Guide to Making Payroll Profitable" to learn how to make payroll profitable for your accountancy practice.