What is a Trusted Adviser?

There's a lot of talk about change in the accountancy profession at the mo... although I guess that's true of any profession or indeed any walk of life.

Traditionally accountancy has been about historic data; getting a bunch of figures relating to income and expenditure that may have happened up to 21 months previously, knocking them into shape and creating a set of accounts for a customer to sign off.

But things are changing... or more accurately... have changed and will continue to change.

The phrase I hear a lot is 'from computation to consultation.'

I think I understand that.  Accountancy used to be about adding things up then taking them away to arrive at a figure - typically a profit or loss and as a result a tax bill or refund.

But customers are getting much more demanding - quite rightly so - and are looking for their accountant to provide much more than simply a set of accounts.

They want contact, information, help, advice and so on.  They want a 'Trusted Adviser'.

Apparently.

I thought I understood what one of those was but when someone asked me the other day I fumbled around for an answer for a few minutes before smiling weakly and sloping off to another meeting.

So, I did some research and I was pretty encouraged by what I found...

Firstly, a Trusted Adviser (I'll call them a TA from now on) is asked for by name and clients will seek them out for advice that goes beyond what might be expected.

For example, I was asked the other day about whether a customer could afford a new piece of machinery.  Something, as an accountant, you might expect to be asked.  On the same day I was also asked if I knew someone who could help fix a coffee machine and what would be a good rate to pay for dog walking.

In other words - the relationship isn't just technical.  There's the technical element in it, but it's more about a wider world view.

When asking about, our customers also said they liked the fact that we dress relatively casually - no pin striped suits for us.  That's because we want to like our customers not different from them.  We are business owners first and foremost and can fully appreciate the stresses and strains of running a business.

Other things that I discovered about TAs include 'communicating beyond the question'.  In other words, not just answering the question that was asked but giving the answer context and perhaps even exploring alternative solutions.

Business acumen is needed by a TA, big picture thinking, being technically strong as well as confidence in problem solving.

But the thing that separates TAs from any other 'service provider' is called Customer Thinking.

And that means thinking about any given situation from the customers point of view; asking the question 'how would I feel about that if I were the customer?'

And that's a TA

New Tech

I don't very often need to be reminded how tech is changing the world but sometimes I get a reminder when I wasn't even looking for one.

Here's the reminder I was thoughtfully provided with by the Universe the other day...

A mate of mine had been sent by his wife to buy new shoes for his two year old daughter.

Now I will admit it's been a while since I had to buy shoes for my daughter - she's 21 - but I can just about remember doing it.  Here's the process:

Get a good description of what you are to buy, take some money with you and buy the shoes.  And woebetide if they were wrong.  Daughter would be upset and wife would be cross... and you would be back at the shop tout suite to return the offending items.

So, I met my mate ahead of having a swift half on a Saturday lunchtime and this is what happened.  In the bar he took the shoes out that he'd bought.  He took a photo of them which he sent to his wife using WhatsApp to gain pre-approval before he went home.

thirty seconds later he got a response and thirty seconds after that we were back in the shoe shop asking for a refund.

It was almost deja vu on Monday when I checked what our Support Centre was suggesting in terms of what they are calling our 'Software Estate' and I have to say even I am impressed with what we can now do.

When a new customer comes on board we have to provide something called a Letter of Engagement - this has all been streamlined.  Going forwards we will only have to set up a new client in one place and that will populate everything else.  Currently we have to type the same details into at least three, sometimes six different places.

Our bookkeeping system can suck through bank transactions automatically, reconciles bank accounts and provides us with client portals.in preparation for GDPR... (more about GDPR in future posts).

For customers who can't access Internet Banking we can now take paper bank statements and scan them directly into spreadsheets or - even better - directly into Quickbooks.

Another app allows us to take photographs of expense claims and our accounts production software will be fully Making Tax Digital ready.

We can provide management accounts and dashboards to our clients providing them with up to the minute information about how their business is performing.

I love all this stuff and can't wait for the chance to implement it all even though I was a bit nervous about online only accountants that are springing up.

But then I was reassured when I read the following piece in a magazine:

'You are at the centre of a raging tornado of innovation.  We must embrace technology but not become it.  Clients will engage, relate and buy services based on the experiences they are provided.  Customer Experience is rated as the single most exciting opportunity in client growth and retention.

Remember, people buy from people first.'

And suddenly I wasn't nervous anymore - and neither should you be even if your industry is going through as much change as ours...

Tax - It's Complicated...

...or at least people like me would have you think so.

It has to be said, though, that this year there is some justification to the claim that 'tax is complicated' especially if you live in Scotland.

The new tax year started on 6th April - we are in the 2018/19 tax year - and in Scotland that date is particularly significant.

It represents the day that the Scottish tax regime diverged significantly from the rest of the UK.  Instead of the four tax bands we had up to 5th April there are now six for those of us who live in Scotland.

(And if you're unsure whether you are subject to the Scottish rate of Income Tax have a look at your tax code - you'll find it on your payslip.  If it has an 'S' in front of it then you are part of the Scottish regime).

So, the new standard tax bands in Scotland are (and this assumed you have standard tax code of S1185):

Income:

From nil to £11,849 - 0%
From £11,850 to £13,849 - Starter Rate - 19%
From £13,850 to £23,999 - Basic Rate - 20%
From £24,000 to £43,429 - Intermediate Rate - 21%
From £43,430 to £149,999 - Higher Rate - 41%
Above £150,000 - Top Rate - 46%

The effect of all this depends on your income levels.  If you are a 'lower' earner you would pay a bit less.  A 'higher' earner would pay a bit more.

For example, if you have a £15,000 salary in the 2018/19 tax year this is how your tax would work out in Scotland (not taking into consideration National Insurance):

£15,000 salary less the personal allowance of £11,850 = £3,150 taxable income
£2,000 of this would be at the Starter Rate of 19% = £380
£1,150 (the rest of the taxable amount) would be at Basic Rate of 20% = £230

Total tax = £610.

If you earned the same amount of money in England you would pay £630 - £20 more than Scotland.

However, if you earned £45,000 in 2018/19 it flips.  Here's the calculation:

£33,150 would be taxable after taking off the personal allowance.

£2,000 of this would be at the Starter Rate of 19% = £380
£10,150 would be at Basic Rate of 20% = £2,030
£19,430 would be at the Intermediate Rate of 21% = £4,080.30
£1,570 would be at the Higher Rate of 41% = £643.70

Total tax = £7,134

If you lived in England and earned the same salary the total tax bill would be £6,630.

You pay £504 more if you live in Scotland.

So - more complicated because of the increased number of tax bands.  And remember the more sources of income you have the more complicated it gets.

If you have some salary, but have a business that you earn from, too, you have some bank savings and some dividends and you rent out a property (and heaven forbid if you sell it during the year and have Capital Gains Tax to calculate!) it does get a little messy.

But not to worry - there's a really good calculator on the BBC website - you can get it here:

http://www.bbc.co.uk/news/business-17442946

To help work out where you are and whether you will be better or worse off.

If you'd like to talk about any of this then feel free to get in touch - we'd be delighted to talk it through with you.

Draft Scottish Budget 2018/19

Here's our review of the draft Scottish Budget for 2018/19.

It's been an interesting one to say the least and puts Scotland firmly out of step with the rest of the UK.

More detail to follow but for an overview follow the link...

https://www.taxassist.co.uk/corstorphine/resources/show-budget-report/id/117/

Looking for a new role? We have a vacancy...

Portfolio (Customer Service) Manager (£20,000 starting salary)

We are looking for an A+ member of staff to join a team of 15 people at our busy Corstorphine office.

https://www.youtube.com/watch?v=50EV6GiTjRE

If you've taken the trouble to watch the video you will see what our customers say about us. We're looking for someone to join our team of Portfolio Managers. Our PMs are responsible for delivering service so good that they get similar comments across the board.

The new Portfolio Manager to join our existing team of two PMs in a fast moving, busy, engaging, sometimes stressful office environment.

As a business we are constantly striving to deliver the very best in customer service.  We are deadline driven, have lots and lots of clients and are moving from the traditional view of an accountant to a tech driven company offering business advice and support.

The team is a dedicated bunch, tight knit and enjoy the occasional night out!  We continue to grow so are constantly on the lookout for like-minded people to join us.

So, what are we looking for in a Portfolio Manager?

Many, many things. Firstly we need someone who is willing to learn and learn fast. It's a busy role and knowledge will build up over time - we understand that - but we need someone who can pick up the baton and run with it from day one. We have high standards around service delivery and customer service and we need someone with standards at least as high as ours.

We also need someone with an open mind because we like to do things differently for the benefit of our customers.

We need someone who is well organised. The role has lots of elements: our Portfolio Manager's prime responsibility is customer service but they will also be completing tax returns, looking after payroll for their customers, making sure information is being chased for at the right time so deadlines are met without fail.

Then there are inbound telephone calls, emails and general queries to be dealt with, all within our Service Level Agreements. Oh, and don't forget Dividend Calculations and other Companies House questions.

Our Portfolio Managers get to know their customers well and will be looking out for snippets of information so they can proactively pass on value added services... they will also meet with their customers to sign off accounts and tax returns.

And finally, our PMs meet with potential new customers, find out their needs and sell them the right services to meet those needs... at the right price, of course.

The ideal candidate will have worked in an accountancy practice and be at least partly qualified. If they haven't worked in a practice at the very least they will have worked in a busy office environment with a relentless focus on customer service - if they have been in a workplace that required them to hit targets so much the better.

They will be accurate in their work (attention to detail is very, very important) and will be able to prioritise their workload to meet demanding and conflicting needs.

We have a detailed training plan in place so if all of what we've covered sounds daunting, don't worry. For the right candidate development will be provided and we always encourage team members to develop their work based and theoretical knowledge by taking professional qualifications.

So, to summarise:

The role is busy... it is customer focused; essentially our new Portfolio Manager will be looking after the ongoing needs of a group of clients as well as taking the time to build value in their portfolio by bringing on new clients.

Or, think of it this way, they will have the opportunity to effectively run their own practice within the safe environment of a larger business.

Next Steps: In the first instance you should call Richard Lambert on 0131 202 9888.  

We’re looking to fill this role as quickly as possible and so will be running interviews over the next couple of weeks.

Interviews will be at our office in Corstorphine and there will be two of them – firstly a get to know you meeting (we know you’ll be looking at us as well as us looking at you) and then a more in depth interview if you are successful through the first stage.

Making Tax Digital

Making Tax Digital... Ever heard of it?  Know what it is?

Whether you have or haven't it seems as though you're in good company.

About half the people we speak with have heard something about it and to the other half it's completely new.

So, what is it?

Quite simply Making Tax Digital or MTD, is the biggest change to the way tax is collected since the introduction of Self Assessment more than twenty five years ago.  In fact, we think it's bigger because it effects both individuals and companies.

MTD is the government and HMRC bringing the way individuals and businesses report on their tax affairs into the modern age.  It brings together all the different ways tax is reported on into one new process.

It is so big that it's being introduced over three reporting periods: April 2018 is the first critical date, followed by April 2019 and April 2020.

Before I launch into a huge explanation of what MTD, how it will work and what we're doing about it I need to make one thing perfectly clear: this is a huge project and timelines might shift and change.

In fact, there has already been some movement - so expect more.

Big Picture first.

HMRC and the government want to modernise reporting of income, expenses and profits because they reckon businesses make too many mistakes.  They also want to make the whole process more efficient and help (for 'help' read 'force') businesses to have better information about their finances.

Still big picture.

In essence when the project is fully implemented every business and individual tax payer with untaxed income of more than £10,000 will have to complete a return for HMRC four times a year and then complete a 'consolidating' report as well.

Just a little bit of detail...

If you run let's say a market stall as as sole trader and you make more than £85,000 a year from April 2018 you will have to submit a return of estimated figures cover the period April, May and June by 31st July.

You'll have to do the same again for the period July, August and September by the end of October... and so on.

And you'll have to keep records digitally... and you'll have to submit using government approved software.

At the moment the timescales for implementation look like this:

- April 2018: unincorporated bodies with turnover more than £85,000 will start reporting for Income Tax and NI

- April  2019: all other unincorporated bodies with turnover of more than £10,000 will start reporting for Income Tax and NI and all VAT registered businesses will report for VAT

- April 2020: all companies will report for Corporation Tax

Our message.

This is a huge, even mahoosive, project and details are still a little thin on the ground.

But please rest assured that we're on it.  We'll keep you posted and we'll make sure you know exactly what's happening, when, how and even who.

To start the ball rolling here's a link to a video we've prepared which should give you a high level view of MTD:

https://youtu.be/2eVaXroeVbo

How Much Should I be Paying My Accountant?

Hmmm...

A difficult question to answer but one I'm asked quite a lot.

Before having a go at answering this particularly thorny question I need to go back a little bit to explore the nature of 'price'.

First things first, then.

There is no such thing as cheap or expensive.  There is only value for money or not value for money... whether someone can afford something is an entirely different issue.

For example, I quite like cars and I quite like Bentley Continentals.  There's a Bentley Continental GT Speed for sale at the moment which starts from £168,900.

Is this cheap or expensive?

Well, in my heart of hearts I know that it's pretty good value for money (although other opinions may differ) and if I had the money I would buy one.

But I don't have the money, so I can't buy it in any case.  Does that mean it's expensive?  No... it just means I can't afford it.

And it's the same with your accountant - are they cheap or expensive?

Well, neither, actually.  They're either providing you with good value for money or poor value for money.

So the question is not is your accountant expensive, it's what's good value for money?

Here we get into the realms of opinion.  Just as I think the Bentley Continental GT is good value for money others will think it's a monumental waste of dosh - why on Earth would anyone spend such a vast amount of money on something that does the same job as a car that cost, say £20,000... or £10,000?

It all depends on what you're looking for in your car or accountant.  For me, what I believe to be good value for money is an accountant who is proactive - who contacts you with relevant information or ideas or suggestions for changing things around.

I also think good value for money is an accountant who charges a fixed fee that doesn't vary if you call a couple of times a month, or you pop into their office.  And don't think this is entirely altruistic... it's a win-win.  If you ask your accountant's opinion of for advice and they are able to help you out it just means there's one less thing for them to sort out at the end of the year.

Finally, I think good value for money is transparent.  You should know what you're paying up front and there should be nothing hidden because then you can budget correctly for period ahead.