Groundhog Day for accountants is here… again
Groundhog Day for accountants is here… again
Self assessment was launched in 1997 but despite having over 25 years to master the process, accountants are still grappling with the annual tax return deadline. Richard Hattersley explores why the busy season continues to exasperate the profession. This feature forms part of our special editorial report on the subject, in association with Xero.
Self assessment season is here… again. At this time of year, the rustle of a carrier bag of receipts starts sounding a bit like when Bill Murray’s character in the film Groundhog Day wakes up every day to the Sonny & Cher song “I Got You Babe”.
Yes, there is something about self assessment season that feels like you’re living the same day over and over again. It’s the accounting version of Groundhog Day.
An annual headache
You might think self assessment has been around long enough for accountants and their clients to get used to the annual rhythms and – more importantly – the deadlines. But, year after year many end up falling into the same trap, with the festive period swallowed up by tax returns and January spent burning the midnight oil.
Then there are the clients. Despite their annual promises to get things in early next time, you’ll still end up chasing the same ones every year as the clock ticks towards deadline day.
Cries of “never again” can be heard in practices around the land on 1 February – only for the whole nightmare to start all over again the following January.
A better way
Not every firm is trapped in this rinse-and-repeat cycle. As self assessment reaches its twilight years, many firms have found a better way.
Fed up with the January slog, proactive firms have started setting earlier internal deadlines. Alex Falcon Huerta, founder of Soaring Falcon Accountancy, finished all her tax returns before 31 July to ensure clients can manage their payments on account accurately.
She explained that getting self assessment work done way in advance of the January rush helps clients better plan payments and their finances, especially with a volatile economic climate.
Starting much earlier and planning ahead also benefits her as a practice owner. Besides reducing stress, it enables her to spend more time focusing on the business, growth plans and cashflow, rather than writing off December and January to self assessment work. “Being proactive allows for time later to be used on consulting, not on deadlines that could have been managed several months ago,” said Falcon Huerta.
Others have kept a tight leash on their capacity, despite temptations to use the January rush as an opportunity to grow. “I would rather say no to clients and stagger our onboarding slightly, than take on every single client and put too much demand on staff,” said Karen Kennedy, owner of Kennedy Accountancy.
Making sure employees aren’t overloaded during tax season has benefits all year round. “I know that if I treat my staff well, be the best leader I can be, give them autonomy and support, then my firm will be the best. That doesn’t mean working onChristmas Eve just because I have taken on too many new self assessment clients.”
Kennedy said her self assessment process is always evolving and relies heavily on internal processes and technology. This starts on 6 April when she sends each client a tax return checklist. She then follows up with regular reminders.
Kennedy asks clients to submit their records before the end of September, otherwise they’ll be charged more. Although she has almost become a victim of her own success, with clients now so well trained that she is inundated with tax return correspondence in April.
Curveballs happen
Even for those well-prepared for self assessment season, there are always curveballs that accountants and bookkeepers just can’t prepare for.
Last year, for example, HMRC decided to screen agent calls from December, answering only those deemed “priority” in the run-up to the 31 January deadline. The measure was taken to alleviate the tax department’s self-inflicted backlog after it closed its self assessment helpline for three months over the summer to divert resources elsewhere.
This inevitably had a knock-on effect on agents, who spent longer than usual on the phone trying to get answers about their clients’ self assessment tax affairs.
There are also always new tax challenges for accountants to help clients navigate. This year presents the complex problem of working out what goes where on the self assessment form for those clients affected by basis period reform.
Accountancy firms’ growth ambitions are the other challenge that can upend self assessment season. For those looking to scale, January is one of the best opportunities of the year to pick up new clients who need support. However, the type of taxpayers who are looking for an accountant so close to the January deadline may not be the ideal client you’re looking to add to your practice.
Appearing on an episode of AccountingWEB’s Any Answers Live shortly after the January 2024 deadline, Eccounting’s Rebecca Williams said: “If we had the exact same clients as the previous year it would have been smooth sailing, but we took on quite a number of new clients between October and January because we don’t like turning people away. That was a bit of a learning curve. So we spent a lot of that time handholding.”
Change is ahead
Tax curveballs and the toils of taking on January clients are to be expected, but anecdotal evidence from AccountingWEB’s Any Answers community and statistics from HMRC in May 2024 showed that almost 300,000 self assessment returns were filed in the first week of the new tax year, almost 10 months ahead of the deadline. The figure was up by nearly 50,000 on figures from 2023. So, many practices are busy with tax return work way before the start of summer.
Just as many in the profession have finally got into the swing of self assessment, the whole process is set to change again with the introduction of Making Tax Digital for Income Tax (MTD IT) in April 2026.
Practitioners will soon be saying goodbye to self assessment season as we know it. Instead, they’ll be bracing for a future of quarterly reporting and digital record-keeping. Any masochistic accountants and bookkeepers who will miss experiencing the January rush can console themselves with the knowledge that the deadline for the final declaration will still be 31 January.
Ever since Paul Aplin filed the UK’s first electronic tax return on a Saturday afternoon in April 1997, the tax system has become increasingly digital. The latest evolution of self assessment continues this journey and brings the need to adopt different technology, implement new processes and educate clients.
It also means that although getting clients onto digital records will help things get better, the same client chasing, strict internal processes and deadline stresses aren’t likely to disappear completely, especially with so many clients unaware of the benefits they could see, or unwilling or unable to make the change. The more things change, the more they stay the same.
There is no escaping accounting’s Groundhog Day.
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