HELP, I have identified lots of tax opportunities for my client but how the heck am I supposed to work out which ones to tackle first?
Have no fear, I’m here as your CTA BFF to give you some tips on how to cut through the noise and prioritise tax opportunities without having a panic attack.
Planning
Your tax review (whether that be with our Tax Diagnostics or via your own review) can identify A LOT of tax opportunities (200+ in some cases). You might even have software to do that for you.
But you may feel lacking in tax knowledge to recommend certain opportunities to your client or even explain them to your client. What if I recommend the wrong one or miss something?
How do I shortlist that many tax opportunities?
Remember you can’t deal with every opportunity at once and some opportunities aren’t even suitable for your client.
You need to create a plan. This blog will cover my tips on how create a plan and deliver it with your client.
I’d recommend that you identify 3-5 tax opportunities you can help your client with over the next year. Set deadlines to achieve these goals and identify who is going to take the action – you, your client or a specialist.
Then you need to review these opportunities every month to ensure they are on track and all parties are kept accountable.
Treat the opportunities like a project. You can break them down into steps to make it more manageable and easier to understand.
Discovery
Discovery is the key to this whole process. What do we know about the client? What do they want to achieve and by when?
You know your client the best, this is your power card. Step into the shoes of your client.
What is the most important thing to your client and most urgent? What do they actually care about? Which tax opportunity helps them achieve the goal or do the thing they want to do?
Your client isn’t going to want to be presented with 200 tax opportunities and be told to review them and figure out what they want to do.
They need you to recommend them to them based on your discovery. You are their trusted adviser at the end of the day.
Here’s an example:
Your client wants to buy a new car for their family. They need £1k per year for their family saving investment pot.
How can I get them £1k extra in their back pocket after tax per year?
Look at directors and employee incentives… salary versus dividend split, benefits taken from the company, what other ways can they extract value from the company?
Tax savings
A handy way to look at priorities is the biggest savings. How much could the client save?
Quantify that as one-off or annual recurring savings.
What savings do we need to make for the client to help them achieve their goals?
Savings are a factor in your decision making process as you whittle down the tax opportunities.
Present the savings to your client – over 1,5,10,15 and 20 years or one-off. It brings the tax opportunity to life and turns heads.
Deadlines
Does your client have a deadline for an event or goal? The time sensitive ones are the ones you need to consider first.
If your client wants to sell their business next year, that screams priority.
If your client wants to buy a property to start their property empire in 2 months as they’ve seen a property they want, that is priority.
Your client isn’t going to be bothered about saving £1,000 on how they structure their payroll if they are wanting to sell their business for £3m.
Categorisation
I’d recommend that you try to select tax opportunities which fall into the one of the three categories below:
Quick wins
Opportunities that are easy to set up and put in place which result in small savings being made.
This usually wouldn’t need tax advice nor you as their adviser to help them with.
Examples – business mobiles, mileage claims or pension contributions.
Adviser assistance needed
Opportunities which require you as their adviser to support them.
This wouldn’t need tax advice, but is more complex and requires your experience.
Examples – VAT registration, calculating their optimum salary and dividend package.
Tax advice needed
Opportunities which require tax advice. The client needs to consider their options and decide on the best way to take a matter forward with a clear understanding of the tax, commercial and other considerations.
Examples – sale of a business, share schemes, restructuring the business.
If you can have a 60/40 ratio of quick wins to advice needed, you are bossing it!
DIOY
To ensure you feel comfortable and take the pressure off, I’d recommend you DIOY first. Trial this process yourself on your own business. If you were advising yourself as a client, what would you priorities?
Go forth and cut through the noise, I believe in you!
p.s. I’d love to know how you prioritise tax issues for your clients!