Tax Preparation For CPA or CA Firms
Providing services as a CPA or CA can become overwhelming for you even if you have a team supporting for different operations. Things can especially become difficult for you to manage if you have a large clientele. You have to handle all the different accounts ranging from marketing to operations to inventory to sales. All this can mean that filing your clients’ tax returns can become too complex for you. This is why you should consider outsourcing your tax return services.
If you don’t hire tax preparation services, you will have to manage many things on your own. This guide introduces you to the things you will have to do on your own if you are not getting the help of tax digital consultation services.
It is important to ensure efficient tax planning for your clients so that their tax liabilities are kept to a minimum. Lower tax bill translates into better cash flow for companies and professionals. This can facilitate easier expansion and growth – something which is also beneficial for you as a CPA or CA.
Tax planning will require the following:
- Finding and understanding their business’ tax obligations
- Options available to address those obligations
- Timely analysis
Outsourcing and making tax digital consultation can help you in simplifying the task and take off a lot of burden off your shoulders. This can also mean that you are able to handle more clients simultaneously and grow your business.
Maintain Well-Organized Financial Records
It will be required for your clients to maintain well-organised financial records. Such records provide you with an accurate estimate of their taxes and financial condition. There is a high level of emphasis on maintaining accuracy and up-to-date information. Even if your client has a small business, not maintaining a complete record of their transactions can mean not getting a clear picture of business accounts. It can also increase the risk of an investigation by HMRC. One way to ensure everything is in order is to follow proper bookkeeping. Again, as a CPA/CA, you may not have the resources or time required to maintain regular accounting and bookkeeping. This is again where outsourcing to tax accounting services can help.
Learn the Tax Codes
The job of a tax return accountant is to keep up-to-date with the latest changes in tax codes and regulations. By outsourcing this part of your job, you can focus on your core business operations. Tax codes are used by HMRC to allow businesses to find out how much tax should be deducted from staff wages through the Pay As You Earn (PAYE) system.
If a client is self-employed, they may pay taxes based on self-assessment if they don’t have any other source of income. However, if they have other income sources, a tax code will apply to them. This increases the risk of facing incorrect tax deductions and paying more tax. It will then be required to recover the additional tax paid through tax return. This can be avoided by making tax digital consultation. This will help ensure that the right tax code is chosen. It can also help the HMRC know about the status.
Tax Record Preservation
It is a common mistake committed by many businesses. They lose their tax records from past years. Usually, the objective is to prevent the records from interfering with their everyday activities. With the hmrc making tax digital records essential for a minimum of 22 months from the end of the tax year, you cannot afford to have your clients make this mistake. Some of the benefits of maintaining old tax records are as follows:
- Preparing current tax returns
- Preparing financial statements
- Monitoring business progress
- Keeping track of deductible expenses
Instead of having to deal with this otherwise small task, you can ask your clients in making tax digital for business. Outsourcing to a tax accounting service can mean that you may not have to deal with this time-consuming task.
Filing Tax Returns
Outsourcing to the right tax accounting services can make life much easier for you and your clients. It is important to plan in advance to be able to avoid potential penalties. This means keeping track of the key dates.
If you have a client running a sole trader small business, the self-assessment deadlines will be the same as for others, but there can be some exceptions. For instance, if there are earnings from other sources and you expect HMRC to collect tax automatically, the deadline will be different. If you fail to account for any other detail, there is a high risk of attracting a fine. So it is best outsource and get the help of tax return services. It is a time-consuming affair and will reduce the stress on your resources.
Things can become even more difficult if a client is not just a sole trader. In this case, vat return services will be required because of the involvement of the following factors:
- Corporation tax
- National insurance contributions
- Income Tax
Such outsourcing services use the latest tax accounting software, making the task much simpler for your office. Some services offer high level of customization and flexibility with the range of tax and accounting services they can offer. This can mean better services and more cost savings.
- Outsourcing to a Tax Accounting & Preparation Service
No matter how careful you are with tax accounting and preparation for all your clients, there is always a chance of tax issues arising. It can be difficult for you to address multiple issues on your own. This is where you can benefit from the help of tax accounting services. Some of the benefits of outsourcing to such a service are as follows:
- Preparing and filing your tax returns for your clients
- Providing practical tax advice to help reduce tax liabilities
- Providing support if any tax issues arise
The small fee you pay your tax preparation services will be nothing compared to the penalties they can help avoid and the order they can bring to your and your clients’ business. With HMRC making tax digital for business, the agency now has access to your clients’ financial information from a wide range of sources. This information can be used to cross-check with their tax returns. Many times lack of detailed information, receipts, or other documents can be the reason causing errors. Seeking professional assistance can help lower the chances of getting an enquiry into your clients’ tax returns.
When you get the help of tax accounting services, you will get peace of mind. It also means that the returns are filed to meet professional standards. Such services also bring valuable knowledge and expertise to the table as the legislation keeps changing. Thus, there are many reasons for outsourcing the task of tax returns filing and maintaining proper accounting records of your clients.