“Unhappy with your returns?” – I came up with this question when a businessman came to see me because he was worried that he had not paid any tax for three years. Now when I investigated the situation, I found that his accountant had sent him the necessary paperwork for the first year, but because he had failed to send the signed forms back, the accountant had lost interest in him. He also lost the work, as I was engaged to bring his affairs up to date. I was also able to get a Vat refund of about £30,000, because the forms had been submitted without recognising the special rules available in that sector. Needless to say, it was happy returns from then on.
On the back of that experience I picked up several more cases, and found that by presenting a side-by-side summary each year, the client was able to better understand why his or her tax figures had changed year on year.
The next step was to take the side-by-side analysis into the future, so I can help the client predict his or her future liabilities. In so doing the impact of planning income streams and the consequential has become a routine part of the taxation service. So instead of the question ‘how can I pay less tax’ it becomes ‘how much I have got left, after I’ve paid the correct tax?’
The side-by-side analysis is done on Excel spreadsheets. This means that the actual online submission of self assessment returns, using proprietary software, produces a self checking process in that the amount of the tax liability or refund has to reconcile to the predicted amount.