Initor Global Guide to Outsourcing Company Tax and VAT Services

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Company Tax and VAT services - UK

If you are a UK Accounting Practice looking to improve the way you meet your clients’ company tax and VAT needs, you should consider outsourcing to a supplier such as Initor Global. 

Many accountants do not know where to start when considering options for outsourcing company tax services. The services can include year-end company tax calculations and the preparation and submission of Form CT600, iXBRL tagged accounts and quarterly VAT returns to HMRC. This blog attempts to break down some of the barriers accountants perceive when considering outsourcing while providing examples of the many benefits which can be secured.

What does outsourcing company tax and VAT services mean for a UK Accounting Practice?

Outsourcing means a specialist supplier (or ‘partner’) will take responsibility for preparing your clients’ company tax returns. This can include the preparation of tax calculations for a limited company and the submission of the necessary Corporation Tax returns on Form CT600 and iXBRL tagged accounts to HMRC. If the company (or business) is registered for VAT, the partner can provide all related services, from advice on registering for VAT to the completion of quarterly returns to HMRC and the associated bookkeeping.

Most Practices decide to outsource company tax services when they have a high volume of work to complete. Many limited companies choose 31 March as their year-end, creating a peak of work around December when corporation tax payments and submissions are due to HMRC. This work often clashes with other priorities for a Practice, such as the preparation of Self-Assessment Tax Returns. Some clients may have missed deadlines for submitting VAT returns, or have a backlog of bookkeeping work, with the need to resolve issues quickly to avoid further fines or penalties from HMRC.

The outsourced services will usually be provided offshore from jurisdictions such as India or Asia, and will need to be fully compliant with HMRC’s rules surrounding company tax, VAT and other data protection requirements. As a UK Accounting Practice, you will need assurance the outsourcing partner has sufficient capacity, including qualified and experienced tax specialists and accountants familiar with the UK’s company tax regime, to ensure a fully compliant service is provided.

At a minimum, you should seek an outsourced supplier who is GDPR and ISO 27001 compliant and who can provide assurances over client data security. You should also enquire about the professional tax and accounting qualifications, and accounting software accreditations the individuals providing your outsourced services hold.

Most outsourcing partners will have experience of cloud based tax and accounting software and will provide services seamlessly to your Practice. Integrating outsourced services with the operating framework of internal controls, systems and performance reporting already used by a Practice is essential to ensure the quality of services provided.

Outsource partners can use your customer relationship management (CRM) systems to contact clients to progress work and resolve any matters arising, though some Practices prefer to retain this responsibility.

Why should a UK Accounting Practice outsource company tax and VAT services?

The following paragraphs provide some insight to the benefits a UK Accounting Practice can secure from outsourcing company tax and VAT services.

Professional services provide a better client experience

UK Accounting Practices recognise that it can be difficult to prepare their clients’ to meet HMRC’s deadlines for company tax and VAT returns. By nature, clients will want to put off submitting information to HMRC which results in a tax liability, and will want to delay paying HMRC any tax due until the last possible moment.

In addition, many clients are simply not interested in the detailed work accountants need to complete to ensure tax returns are accurate. From 1 April 2023, the government has introduced higher corporation tax rates. Engaging clients in the importance of managing their corporation tax position throughout the year can assist in smoothing the peak of work when tax calculations must be made, and Form CT600 and iXBRL tagged accounts submitted to HMRC.

Practices outsourcing the CT600 preparation process find they have more time to spend with their clients discussing their company tax situation and engaging them in the process, with the opportunity to upsell high value advisory services and other recurring services such as bookkeeping.

With the introduction of making tax digital for VAT, all VAT registered businesses should be submitting information to HMRC electronically. An outsource partner can work with most tax and accounting software to check HMRC returns and resolve any anomalies before submitting information to HMRC each quarter.

With an outsourced solution, Practices will have access to a team of tax specialists who will provide assurance company tax and VAT returns are prepared accurately and on time, and that experts are available to provide any other services commissioned, such as the preparation of sole trader accounts, bookkeeping or amendments to previous submissions.

Reduced costs and increased quality

The cost of outsourcing tax and accounting services is typically 50% less when compared to the equivalent services provided in-house. With an outsourced solution, there is no need to maintain a large in-house team of tax specialists. When implementing an outsourced solution, UK Accounting Practices often find the review of internal systems and processes needed secures wider efficiencies, such as the automation of tasks and more effective document management.

With an outsourced partner focused on delivering the tasks and processes an Accounting Practice needs, the quality and accuracy of company tax and VAT returns is improved, with an increase in the quality of services to your clients.

Clients can access more services

Using an outsourced solution allows an Accounting Practice to scale up and confidently offer company tax and advisory services to meet clients’ needs. It also ensures a Practice has the capacity to deliver growth in revenues, and that clients have access to all of the services they need as their company tax situation changes.

Reduced risk of service failure

Many UK Accounting Practices rely on a small team of accountants working tirelessly throughout peak periods to achieve HMRC’s deadlines for filing tax information. Reliance on a small number of experienced tax specialists presents a high risk of service failure should individuals leave a Practice at short notice, and if you cannot access a suitably qualified or experienced replacement in time. With an outsourced solution, an Accounting Practice has access to a large team of experienced tax specialists who can provide the continuity of service needed.

Data Protection assured

Most outsource partners will have experience of all major cloud based bookkeeping, tax and accounting software, which can be accessed from their own secure servers. They can also access your Practice server using secure remote login arrangements. Outsource partners can provide evidence they are GDPR and ISO 27001 compliant, and that client data is always secure and cannot be downloaded.

Removing recurring tasks helps develop people

Some UK Accounting Practices are nervous about outsourcing any service because of the perceived negative reaction among their people. However, the removal of deadline driven tasks from the day to day workload of accountants means they have more time to spend understanding the needs of clients and upselling services. Less time is spent on tasks such as contacting clients for missing information and data management, allowing individuals to focus on their continuing professional development and building the skills needed for the future growth of an Accounting Practice.

When is the best time to outsource company tax and VAT services?

 Accounting Practices will need to consider carefully the skills and expertise available to deliver company tax and VAT services, particularly when preparing plans for growth or extending the scope of services offered to clients. The impact of recent regulatory changes, such as making tax digital for VAT and the new corporation tax regime introduced from 1 April 2023 should also be considered.

Not all Accounting Practices will have sufficient capacity to meet the severe peak of work when HMRC’s submission deadlines are approaching. Some Practices see a rapid increase in the backlog of company tax work around December each year, increasing the risk of fines and penalties from HMRC for missing deadlines to file information with Companies House and HMRC. Practices should consider outsourcing at key stages in their business planning cycle, when taking on new clients or when a peak of work is expected each tax year.

What should I look for in an outsourcing partner?

UK Accounting Practices will need an outsourcing partner with the skills, capacity and experience to deliver effective company tax and VAT services. Practices should look for a partner with a strong track record of serving the types of clients they engage, particularly where a company tax situation is complex. You will need to ensure you have access to operational managers responsible for preparing tax returns to discuss any matters affecting your service and to seek opportunities to outsource other recurring tasks for your Practice.

Most importantly, Practices will need assurance the services are provided by professionally qualified and experienced tax specialists and accountants. Seeking references from existing customers of your outsourcing partner is essential to provide an indication of how your relationship will work.

Which company tax and VAT services can be outsourced by an Accounting Practice?

The end to end process of preparing company tax and VAT returns can be outsourced, including the preparation and submission of Form CT600, iXBRL tagged accounts and quarterly VAT returns. A Practice can also outsource the VAT registration and deregistration processes and the bookkeeping work needed to support the quarterly VAT return.

Main features of Initor Global company tax and VAT services

Initor Global has been providing outsourced company tax return services to UK Accountancy Practices since 2006. We prepare quarterly VAT returns and annual corporation tax returns (Form CT600) for your clients to review and tagged accounts for submission to HMRC using iXBRL software. We can also calculate the amount of section 455 tax to be paid by a company where directors have an outstanding loan. Ensuring compliance with HMRC’s rules can be daunting, and penalties can be excessive if a deadline is missed or incorrect information submitted to HMRC.

Our team of qualified accountants and tax specialists provide the company tax return services your clients need, with our rates typically 50% less than the equivalent service in the UK. All services are delivered to the highest professional and quality standards your Practice expects. Many of our accountants and tax specialists trained and worked for Practices in the UK.

Our accountants and tax specialists have experience of all major tax and accounting software, making tax digital rules and iXBRL requirements. We can access cloud based software from our own secure servers. If you prefer, we can access your Practice server using secure remote login arrangements.

We tailor our services to your specific requirements, you can commission work on an ad-hoc basis or using a dedicated, named accountant, who will work remotely as part of your team. Our company tax return services are completely flexible and can be scaled to meet your Practice growth plans or peaks of work. We can help your Practice update its workflows to ensure the smooth transmission of data to our accountants, which in turn ensures an effective turnaround of work.

Our VAT services include:

  • Advice on the appropriate VAT scheme for your clients
  • VAT registration
  • Monthly bookkeeping to support preparation of VAT returns, including late claims
  • Preparation of quarterly VAT returns
  • Filing of monthly and quarterly VAT returns with HMRC using making tax digital compatible software
  • Advice on payments and refunds from HMRC
  • VAT deregistration and filing of final VAT return.

Initor Global is GDPR and ISO27001 compliant, providing the peace of mind you need that your client data is always secure.

You can trust our team of qualified, professional accountants and tax specialists to provide the company tax return services your Practice needs.

If you are looking to take your Accounting Practice to the next level, and provide effective company tax and VAT services while reducing costs, you can arrange a free consultation with our expert team.

We offer a free, no-obligation trial of our company tax and VAT services.

Please contact us on hello@initor-global.co.uk  or visit our website at initor-global.co.uk.

You can also call us on 0203 519 2121.