7 clients who need personal tax planning services and how to find them

How do you identify which clients would benefit most from personal tax planning?

It’s a common question for many accountants, and the answer isn’t always immediately obvious. But the thing is, personal tax planning isn’t one-size-fits-all, which can make finding clients for personal tax planning tricky.

However, certain traits can help you identify whether a client would benefit from personal tax planning or not. In this blog, you’ll learn about the different client types who are ideal for personalised tax services and the tell-tale signs to watch out for.

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Why client selection matters

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Choosing the right clients from the outset can save you lots of second-guessing later on. Not only that, but your early client selection wins can help you build momentum until finally, colleagues from across your firm start noticing your successes and get interested in personal tax planning themselves because your first few clients can serve as real-life examples of the many benefits of personal tax planning, such as:

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• Improved client understanding and satisfaction
• Increased client value and tax savings
• Increased profit for the firm (if charging as a service) and more advisory opportunities like retirement planning, financial planning, and estate planning
• Better client retention and more collaborative partnerships

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As your personal tax services evolve, you can help clients establish better tax processes to save them even more time which also makes it easier for you as you can standardize certain workflows and processes and apply them to other clients, too. 

And now that you know the benefits, here’s how to identify those clients…

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7 traits of ideal clients for personal tax planning

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Here are 7 tell-tale signs a client would benefit from personalised tax planning services.

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1. Clients with more than 1 income stream

Many clients have multiple sources of income, which creates more complex tax situations than someone with only a standard 9 to 5. 

For example, one client could be a salaried employee who also freelances on the side while earning significant dividends from their investment portfolio, while another client could be supplementing their pension with self-employment and property income.

No matter their specific combination of income streams, any client with more than one is a potential candidate for personal tax planning.

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2. Clients who regularly make tax-related decisions

This type of client often faces decisions with major tax implications, such as salary vs. dividend choices, expense deductions and pension contributions, and how to structure (or restructure) their businesses. 

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3. Clients with fluctuating incomes or significant one-off events

Many types of clients fall under this category of fluctuating incomes. Some examples include:

• Freelancers who sign large, short-term contracts
• Artists and creatives who depend on royalties or licensing deals
• Real estate agents who depend on a handful of big sales per year
• Seasonal businesses that make the bulk of their sales during the winter holiday
• Influencers whose income can fluctuate very quickly depending on the success of their content

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4. Clients with their own businesses

This includes not only clients with their own businesses but clients who have shares in other businesses as well. 

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Some areas personal tax planning can help them with include planning investment income, dividends, and pensions contibutions.

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5. Clients who prioritise minimising tax liabilities 

One of the biggest selling points of personal tax planning for clients is minimising their tax liabilities with an ongoing tax strategy. This usually requires accountants to have periodic check-ins with clients throughout the year to stay updated on their lives — both professional and personal — and take a more active, advisory role as well.

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6. Clients who want a personalised service and be more involved in financial decisions 

This type of client may be driven by a desire to learn more about their finances and would appreciate a closer relationship with their accountants that goes beyond the once-a-year self-assessment filings.

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It might be due to them wanting advice on launching a new venture, changing careers, or achieving personal milestones like buying a house.

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Whatever the reason, these types of clients have the potential to build a long-lasting relationship with you as their trusted financial advisor. 

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7. Clients with entrepreneurial ambitions

These are the clients with big dreams, a vision, or ambitious goals they’ve set for themselves and they need an accountant who’s flexible and able to adapt to rapid change.

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4 red flags that clients aren’t a good fit for personal tax planning

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Now that you have a better idea of the types of clients who could benefit most from personal tax planning, let’s take a look at the opposite side — clients who won’t benefit and/or may not be a good fit (at least for now).

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This includes:

1. Employment-only clients

These clients only have their employment income without any other income streams, businesses, investments, or anything else. With a relatively straightforward tax situation, personal tax planning services wouldn’t really make sense for them and they would probably benefit most from more basic tax services like help filing their self-assessments (if required) or goal planning.

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2. Compliance-only clients 

This type of client only cares about fulfilling their tax obligations, such as filing on time and accurately with minimal interaction with the HRMC (and probably zero interaction if they can help it!). They prioritise simplicity and convenience, and want an accountant who makes doing their taxes as cost-efficient and easy as possible for the minimum possible cost.

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3. Clients with stable and predictable income 

Clients whose income is already stable and predictable are less likely to benefit from personal tax planning because they already know what to expect and have probably been handling their taxes for years.  Although, understanding the clients’ goals can present additional opportunities to assist the client.

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4. Clients who don’t have time / don’t want to share their goals 

These clients don’t have any interest in sharing or planning toward their financial goals and prefer to keep their accountants at a distance. That means they wouldn’t be onboard for the multiple check-ins throughout the year that personal tax planning typically requires.

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How to segment your client base for tax planning opportunities

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Here are a few ways accountants and firms can group their clients to make it easier to find those ideal personal tax planning clients:

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• Salary v Dividends clients
• Sole-trade/Partnerships clients
• Multiple income streams (more complex)
• Income over £100k
• Entrepreneurial clients with big goals
• Other - clients who don’t fall into the main groups

Larger firms might also want to segment clients by office or by client manager.

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Note: Each client segment will have different scenario planning requirements and can be handled by anyone from junior to senior members of staff, depending on their situation and needs.

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Example of an ideal client for personal tax planning

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Imagine a client with salary and dividend income plus rental properties making £200k per year. 

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If you’re looking for personal tax planning clients, this client should set off an alert in your mind because they already meet several criteria that indicate they would benefit from advanced tax services as this hypothetical client: 

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• Has more than one income stream
• Faces regular tax-related decisions (i.e. their salary and dividend income)
• Makes more than  £100k per year

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This client would likely benefit from scenario planning, as an accountant could help them optimise their tax strategies across their different income streams while also minimising the client’s tax liabilities.

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Other important client considerations for personal tax planning

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Personal tax planning goes beyond just taxes because each and every client has their own goals, hopes, and dreams that must be considered. That means you’ll also get to know your clients on a deeper, more personal level as well, which is great for building lasting relationships and boosting client retention.

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And even if a client might not benefit from tax planning now, that doesn’t mean it will be like that forever. In a few years, their current situation could change, or they might achieve certain life or career milestones that turn them into ideal personal tax planning clients, which includes things like:

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• Wanting to retire in 5-10 years
• Buying a house in 2-3 years
• Tripling their income next year
• Losing a big client and a chunk of income next year
• Selling their current business in 2-3 years and starting another

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How to use Tax Torch for personal tax planning

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Tax Torch helps make personal tax planning easier for accountants, firms, and clients. 

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If you’re just getting started using Tax Torch’s tax planning capabilities, here are a few tips to ensure you’re off to the right start from your first steps:

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1. Start small with 1-2 clients
2. Meet with clients (or send a simple information request via the platform) to get a better understanding of their personal, business, and financial goals and track them with Tax Torch’s centralised goals feature 
3. Run scenarios using Tax Torch’s scenario planning tool to demonstrate the impact of any changes on the client’s tax position
4. Use Tax Torch’s visual reporting capabilities to create visually appealing reports that underline the value of your tax planning advice
5. Expand based on client feedback and ideal outcomes

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What to expect from Tax Torch

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Tax Torch is a helpful tool that enables firms to deliver scalable, bespoke tax advice with features that simplify the tax planning process for accountants and firms. While Tax Torch isn’t an instant solution, it will make personal tax planning easier with better onboarding and processes, and reporting that demonstrates the true value of personal tax planning to clients. Start your free trial today.