An Accountant’s Guide to Creating Your Firm’s Self Assessment Tax Outsourcing Strategy
Filing tax returns is a resource-intensive process that demands a lot of time and effort. In addition to time-crunch and burgeoning workload, the skills shortage in the UK has reached critical levels. If not handled promptly, it will result in a progressive deterioration of the quality of services and may even lead accountants to miss the Self Assessment tax return deadline.
The usual norm is that the tax season is excruciatingly hectic for accountants. It’s the time when they work fingers to the bone making sure their clients meet all the tax deadlines. However, the scale of difficulty is even higher in the post-pandemic world.
In this Blog, we will discuss the struggles of an accountant and the steps to create an effective Self-Assessment tax outsourcing strategy that will help you navigate this tax season smoothly.
CREATING YOUR FIRM’S TAX RETURN OUTSOURCING STRATEGY
Before hiring an outsourcing company to outsource tax return, 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 the top tax outsourcing firms 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 professionally affiliated with bodies such as ICAEW and ACCA.
Identify the number of tax clients and measure it against your firm’s handling capacity
To manage the outsourcing plan effectively, consider how much time you have and assess the number of clients and 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 and offshore teams.
A simpler way will be – outsourcing taxation services.
Your in-house accountants can utilise the freed-up time to learn more about 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 preparation for individuals and partnerships, tax summary, property schedules, etc.
Choose the engagement and pricing model
Top companies providing tax return preparation outsourcing offer varied pricing and engagement models for accountants to choose from.
There are three modes of co-sourcing to meet each client’s specific needs. They are:
- Working remotely: This 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 login details. If you still have to share other supporting documents, pass them on to your tax outsourcing partner through the secure FTP portal.
- Working on a secure server: All documents are scanned and collected in a secured FTP portal. They are processed and delivered back.
Provide the necessary information and set a deadline
You must have a knowledge transfer session with your outsourcing partner. Discuss the current tax projects you are managing, 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 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 outsourcing companies in Pakistan follow:
- Scanning and uploading documents on FTP server
- Recording the data and processing it
- Finishing the tax preparation 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, leading outsourcing firms have apps that allow accountants to review work from any corner of the world.
How will Self Assessment Tax Outsourcing Benefit Your Accounting Firm?
According to Accountancy Age, 67% of accountants in the UK are all set to outsource some aspects of their 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. Outsourcing is critical in managing this excessive workload during the busy tax season.
Here’s why you must have a solid strategy to outsource tax preparation services for the 2022 Self Assessment season:
Evolving Tax Trends
The digital tax initiative (MTD) announcement was a massive change for businesses. UK accountants spent their entire year working with clients to help them get prepared for Making Tax Digital.
Many such developments are on the horizon. To integrate them well into the client’s business ecosystem, accountants must be well-acquainted with them. With tax preparation outsourcing, you can focus on ‘what’s next?’ rather than the mundane, compliance-driven tasks.
Coping with the Post-Pandemic Stress
Businesses are facing difficulties maintaining their cashflows and generating revenues. They not only need assistance with their tax returns but also with managing their overall businesses.
When you outsource tax preparation, you can take on more work, evolve your service offerings, and become the advisors your clients have always wanted. You can focus on advising your clients in several areas, such as legal, technology, and any business changes needed for a better future.
Deeper Insights to Enable Data-driven Strategies
Data accuracy is of utmost importance for tax compliance, and tax preparation outsourcing helps prepare more taxes accurately. Accurate data enables you analyse and interpret numbers better, facilitating better value for your clients.
Also, the expanded service portfolio helps accountants attract more clients.
THE WAY FORWARD
We hope this article helps accountants create a productive Self Assessment tax outsourcing strategy for their firm. Accountants mustn’t think that outsourcing is just a temporary solution but a strategy that would help their firm grow in the long run.
An accountant must consider making outsourcing an indispensable part of their firm’s workflow. It helps expand your clientele and grow your practice without worrying about the workforce’s size.
In a competition-driven economy, Self Assessment tax return outsourcing helps accountants stay a step ahead with the strategic support and streamlined processes delivered by an outsourcing partner. A reliable outsourcing partner like Fin-eX Outsourcing can help your firm grow with its customised services .