Have you ever waited until the last minute to file your tax returns?
Last year, approximately 1.1 million people missed the tax deadline, according to the HRMC — no doubt causing untold stress for their accountants. And every year, countless firms tell themselves ‘never again’, only to have history repeat itself.
It’s a vicious cycle but it doesn’t have to be this way because reactive, last-minute tax planning isn’t good for anyone. It’s stressful, creates countless bottlenecks (good luck if you have to contact the HRMC), and ultimately, it leads to worse outcomes for clients.
In this article, we’ll show you how to flip the script from reactive to proactive tax planning with a forward-thinking approach so everyone can breathe a bit easier next time tax season rolls around.
Why proactive tax planning matters
Many accountants have experienced the perils of last minute tax planning first-hand, so let’s hone in on what you can expect from a proactivei tax planning approach.
1. Maximise deductions and credits
Being rushed and stressed out can make tax planning harder than it needs to be. It increases the risk of missing something critical, especially if your team is juggling multiple client returns at the same time.
This can result in clients missing out on opportunities to reduce their taxable income, such as a client forgetting to mention their charitable donations or pension contributions and then missing out on that deduction.
Proactive tax planning avoids these situations and gives your firm the time to optimise your clients’ tax benefits. When you’re not rushing to meet a deadline, you can ensure nothing gets missed throughout the year as everything gets updated and reported as it happens.
An added bonus — by the time tax season comes, you’ve already completed much of the legwork and submitted a large portion of the returns, hopefully leading to a less stressful festive period.
2. Greater flexibility and better decision-making
Starting tax planning earlier helps you keep an eye on your client’s financial situation throughout the year, which makes it easier to identify what’s working while having the flexibility to adapt to opportunities, threats, and other changes.
Flexibility is important because tax laws change all the time, like when a new government has just been sworn in and there are big budget changes.. But being proactive can help clients adapt to legislative changes without the added pressure of the deadline looming over your shoulder.
3. Personalised advice creates closer relationships
Another benefit of proactive tax planning is it gives firms the opportunity to provide ongoing, personalised tax advice throughout the year, the benefits of which cannot be understated.
Giving personalised tax advice helps create a more collaborative working relationship where you and the client feel more like a team with a shared goal, instead of clients simply emailing their tax info and leaving it in your hands.
Everyone appreciates a personalised approach because it makes them feel valued, and this can deepen the client relationship and even improve retention in the long run.
Plus, tax planning throughout the year means you have more time to take a deeper dive into your client’s finances to deliver better advice, instead of the standardised, one-size-fits-all recommendations that you might be forced to give if you’re scrambling at the last minute.
How Tax Torch streamlines tax planning
One of the driving inspirations behind Tax Torch was providing a proactive tax planning tool to eliminate the eleventh-hour sprint before the tax deadline.
Now that we’ve gone over why a forward-thinking approach is so important, here are a few ways Tax Torch helps firms achieve that while also streamlining the entire tax planning process.
1. Centralised client data and goals in one place
Tax Torch centralises client data within a single platform, which fixes a process that’s often broken or fragmented. What this means for firms is no more:
- Scrolling endless email threads for lost attachments
- Double-data requests that annoy clients
- Incomplete forms or inaccurate data
- Disorganised documents with dozens of versions
In addition to solving these common data headaches, Tax Torch allows you to keep track of your clients’ life, business, and financial goals in one place for easy access and improved performance tracking.
2. Accurate salary vs. dividend calculations
Tax Torch’s built-in Salary vs. Dividend Calculator quickly calculates the optimal tax position for clients and helps you provide the best possible advice that is tailored to your client’s specific needs. This helps clients in everything from making better business decisions to reducing their tax burden, while also saving firms the time and complexity of calculating it all manually.
3. Real-time scenario planning with easy comparisons
With Tax Torch’s real-time scenario planning, you and clients can explore different tax scenarios and instantly see the impact, which turns the uncertainty of making complex decisions into something more simple and clear.
This allows clients to feel more confident about not only planning for the future but also the decisions they make by providing a proactive, data-backed basis upon which to build their strategy moving forward.
4. Visually appealing, client-friendly reports
All too often, the big takeaways can get buried deep in a spreadsheet or lost in the pages of a long report that clients never read. This goes to show that even the best data in the world means nothing if your clients don’t see it or can’t understand it.
That’s why Tax Torch helps accountants and firms create professional, visually appealing reports that quickly get to the heart of the matter so that clients truly understand the value and impact of your tax planning advice.
5. Scalable for firms of all sizes
Whether you’re a small/mid-size firm or a large enterprise organisation, Tax Torch can help you quickly scale your tax planning capabilities by bringing together usually scattered information into a streamlined consistent process.
Be a proactive tax planning pro
Even though the end of the tax year is fast approaching, there’s still time to be proactive and get a headstart on things and really add value to your clients and identify fee generating opportunities.! We highly recommend reaching out to clients now to get the ball rolling and begin asking for the important documents you need ahead of time because you’ll be glad you did.
The best time to start was yesterday, but there’s no better time than now.
Discover how to deliver bespoke personal tax planning without the headaches. Join the waiting list today and see for yourself how Tax Torch’s proactive approach makes tax season easier for everyone.
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