Tax Planning Sin 3: Inadequate Time Spent on the Tax Plan

Tax Planning Sin 3: Inadequate Time Spent on the Tax Plan

tax plan

Even if accountants are well trained and utilising tax planning software it will still take 2-3 hours (on average) to complete the six stage tax planning process for a client. Skipping any of the six stages, or not spending adequate time on a stage, will result in a substandard result for the client. The tax plan will be sub-optimal and result in the client paying more tax than they otherwise should. 

One area accountants typically spend inadequate time on is client communication. Although the work many accountants produce is of a high technical standard, inadequate client communication lets them down. Unfortunately, this is the case with tax planning services too. Step 6 of the tax planning process (client discussions and implementation) is critical to ensure the client understands the tax planning process, selected tax strategies, and process to implement the tax strategies. 

The Tax Planning Interview with the client requires an investment of one hour to ensure the tax strategies are actually implemented and they save the client tax. This stage should not be shortchanged as unless the client actually saves tax, nothing has been achieved (and the whole process has been a waste of time and money).

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"You’d be stupid not to try to cut your tax bill and those that don’t are stupid in business"

- Bono: U2