For accountants, January doesn’t feel as much like a new year as it does a scramble to finish off the old year – in financial terms.
Here’s a look at three of the more onerous tasks 2018 has in store for you, and how you can help yourselves – and your clients – prepare.
Task 1: The completion of those pesky tax returns
For many of your clients, tax returns for 2016-17 will be a distant memory. They’re done and dusted and the financial affairs of those clients are all in order ready for the end of the current financial year. It’s all about 2018!
But unless you’re unbelievably lucky, you will also have clients stuck firmly in the past, ignoring your requests for those last few receipts or documents needed to complete their tax return.
This may be par for the course, but ensure your clients understand that while you may be their accountant, it is their responsibility to submit their tax return on time – and it’s them who will pay the immediate £100 fine for late submission if they don’t do so.
It’s worth sending out a polite but firm email to this effect while there’s still a few weeks before the 31st January deadline. It will then be clear that you aren’t liable if their failure to provide the paperwork you need means you’re unable to file their return.
Task 2: Making Tax Digital – for you and our clients
If you’re not already doing everything digitally in your practice, now really is the time (in fact, the time was a few years ago, but we’ll let you off).
Don’t put it off any longer. If you’re not confident about online accounting and tax return submissions, you will be little help to your clients as the Government’s Making Tax Digital (MTD) programme moves inexorably forward.
MTD is currently scheduled to come into effect in 2019 and many of your clients may find the changes bewildering and hard to adhere to. The more cautious or canny of them won’t wait until 2019 to seek your advice. They’ll be concerned whether their current book-keeping practices will be sufficient and how they will have to change them to comply with MTD.
Now is the time to investigate software solutions that will make the process easier. Cloud accounting packages allow you and your client access to their real-time financial data anytime, anywhere.
You’ll also have the added security of knowing that the data is stored across multiple servers and locations – it’s constantly backed-up and can’t be lost if a laptop or memory stick is damaged or lost, or destroyed by physical damage, such as an office fire.
Pandle provides cloud accounting solutions for small businesses and freelancers (including a comprehensive free package), plus cost-effective packages for accountants, including those looking to provide their own branded offering.
Task 3: Explaining tax policy changes to your clients
You and your clients also need to be aware of the tax policy changes that will come into force in the new financial year.
From April 2018:
- If your clients are landlords, the percentage of their finance costs deductible from rental income for tax relief will fall from 75% to 50%.
- If your clients receive income from dividends, their tax-free allowance for that income will drop from £5000 to £2000.
- There are also changes to the tax legislation around many other issues, including:
- The inheritance of offshore trusts
- Venture capital trusts
- The diesel supplement on employee vehicles
- Business partnerships
Digitising finances should make things much simpler for you clients and for you, leaving both of you better prepared for upcoming changes in the way income and tax are recorded and assessed.
Prepare now for a simpler, less taxing, 2018!