In this article, Jones Harris Director Martin Wigley provides useful advice for anyone looking to find a good accountant.
HMRC published a document in January 2018 setting out the standards which they expect from all agents who deal with them on behalf of clients, so choosing a good one is more important now than ever.
Jones Harris, like all those affiliated to professional bodies, are already covered by their rules. But as a potential client how do you find a good accountant that operates to HMRCs standards?
Which Accountants Can You Count On?
By Martin Wigley
When dealing with most professionals, you can safely assume they have undergone the training necessary to deal with the matters you entrust to them.
Doctors, nurses, solicitors, teachers and the like all operate in well regulated industries.
But what about accountants?
There is no overall regulation of the accountancy industry. Effectively, anyone can set up as an “accountant” whether or not they have any training or experience. Granted, there are certain types of work, such as company audits, where only properly certified individuals and firms can operate but, more generally, anyone can prepare accounts, tax returns, cashflows and so on.
There are hundreds of businesses offering accountancy and taxation services. So how can you be sure you’ve chosen an accountant who is more qualified than you to prepare your accounts or tax return?
How to Find a Good Accountant
A wise first step is to look for accountants who are members of a reputable professional body, such as the Institute of Chartered Accountants, the Chartered Association of Certified Accountants, the Chartered Institute of Taxation or the Associations of Accounting or Taxation Technicians. Membership of such bodies is a good indicator that the accountant has received professional training and has experience in taxation and accounting matters.
The ‘Expectations’ of HMRC
Membership normally also demands compliance with specific, recognised codes of practice that are there for your protection. In January 2018, responding to continuing calls for a more level playing field and more transparency about what a professional accountant should deliver, the Government published its own list of ‘expectations’.
Its corporate report – HMRC – the Standard for Agents – applies to “any professional who advises or acts on behalf of others in relation to their tax affairs.” It requires agents (amongst other things) to maintain up to date knowledge of the tax areas they deal with, and to comply with current data protection regulations, which will shortly include GDPR. It places particular importance on safeguarding passwords and other “online access credentials.”
These are commonsense requirements but it’s important that your chosen accountant abides by them. Professional bodies observe defined standards, such as PCRT – Professional Conduct in Relation to Taxation – that help to protect your interests. These standards should also cover other important requirements, such as consistently operating within the law, having clear terms of client engagement, keeping accurate records, and providing tax planning services based on a credible view of current legislation.
Full details of the report can be found at https://www.gov.uk/government/publications/hmrc-the-standard-for-agents/hmrc-the-standard-for-agents.
Promoting Higher Levels of Professionalism
Essentially, these expectations are all about protecting clients by promoting higher levels of professionalism and accountability. Membership of a recognised body is an important step towards ensuring this.
Which questions will help you to find a good accountant?
Let’s assume you’ve developed a short list and made sure that everyone on it is a member of a reputable professional organisation. What next? Well, it’s well worth probing a bit more by interviewing each of your prospective providers in turn.
Ask questions such as:
What qualifications do you hold?
Look for evidence of qualifications awarded by one of the professional organisations listed above.
How much experience do you have?
Experience can make a tremendous difference to the quality of the service you receive, but a lot depends on the nature of your work and on the complexity of your tax and accounting affairs.
For example, an accountant with a background in preparing personal tax returns is unlikely to be ideally equipped to prepare statutory company accounts. Likewise, if you regularly work abroad, you might do well to choose someone with experience of foreign travel claims, and an understanding of the UK tax residency laws.
Certain sectors also present specific challenges. For example, the tax rules around farming can cause significant problems if people are wrongly advised. Similarly, medical practitioners working in and around the NHS will also benefit from specialist guidance and advice. An accountant’s experience with accounting software packages can also be important, especially now, with business accounts moving increasingly to the cloud.
Relevant experience is essential if you are facing issues with HMRC; you are always going to be best served by an advisor who is familiar with the way that HMRC works, its protocols, guidance and operational regulations. This can help to prevent confusion and unnecessary delays, which could be costly if penalties and interest are at stake on top of the underlying tax liability.
What steps do you take to keep abreast of changes in legislation?
Obvious examples are the General Data Protection Regulation (GDPR), which comes into effect in May 2018, and the accompanying ePrivacy Regulation.
Accountants must have suitably secure systems to handle data, and their various processes must be set up in a way that delivers full legal compliance. However, these aren’t the only issues. As you can read in our Making Tax Digital section, HMRC is moving steadily towards digital tax reporting, and other government agencies such as Companies House are also shifting towards digital record keeping. You need to be sure that your chosen accountant has systems that can cope with the increasing demands of digitisation.
What access do you have to specialist knowledge?
This is particularly important. In the current climate of constantly changing legislation and regulation, it’s impossible for any one person to know everything. Understanding where one’s experience ends is vital.
A good accountant in general practice should have the experience and training to recognise cases that might call for more specialist, in depth knowledge. That’s the only way to ensure that you – the client – receive the best possible service and advice. In many larger firms this knowledge is maintained in-house, but even sole-traders should have access to networks that can provide the answers. However you won’t know any of this unless you ask. Specialists in any walk of life don’t come cheap, but the savings will often outweigh the cost.
Are you insured?
As with other professions and trades, accountants are only human. Although any responsible accountant will take every precaution to avoid mistakes, they can happen, and that can mean unnecessary losses on your part. It should be a comfort to know that if the worst were to happen, your accountant has indemnity insurance to cover any loss.
Finally, another simple and common sense suggestion: talk to other people in business about their accountants. A personal recommendation is usually a very good indicator of an accountant’s competence.
Staying abreast of requirements – an insider’s view:
At Jones Harris, we’re very conscious of our professional obligations and keenly committed to staying ahead of the game. However that requires constant vigilance and a recognition that the industry never stays still.
We are members of ICAEW – the Institute of Chartered Accountants in England and Wales. As such we adhere to recognised codes of practice that are firmly in line with HMRC’s recently re-published list of expectations. We ensure that staff understand changing regulations and we invest in continuous improvement.
A good example relates back to HMRC’s requirement that agents will “comply fully with data protection law and regulations, including keeping online access credentials safe from unauthorised use at all times.”
Security is of crucial importance to a business like ours and, since we often hold financially sensitive data, we go to considerable lengths to keep that data safe. For the last 12 months and more, we’ve been steadily strengthening, streamlining and modernising our databases. It has been a significant undertaking – as our in-house IT specialist, Matt Arnold will testify – but it represents an essential step in our continuing development.
With the advent of the General Data Protection Regulation and the ePrivacy Regulation, data security is something every business should be taking seriously. We’ve been investing in upgraded systems for many months now and we’re confident that they will stand up to the closest of scrutiny. We’ve also been taking advantage of specialist training to make sure that all Jones Harris staff know how GDPR will affect their work and how to stay fully compliant.
In tandem with all this, we’re working hard to alert clients and local businesses to the reality of the forthcoming Making Tax Digital initiative, which will represent a huge change in the way that companies report their tax affairs. Our internal systems are ready and should cope well with whatever changes MTD ultimately brings, but we still see far too many businesses who appear unprepared. In our MTD blog, we’ll provide regular updates on this evolving landscape, together with recommendations on how best to prepare.
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