Linkedin is quite distinct from other 'social media'

I have made this point explicitly three times in the last 24hrs in response to different stimuli. It’s something I have also stressed in my talks, articles and blogs in recent years.

In my view you should be wary of anyone who simply references ‘social media’ in the context of accountants (or indeed other senior professionals). If they do not distinguish LinkedIn as distinct from other social media then they are probably insufficiently familiar with LinkedIn and/or accountants to be offering you advice. And the basis for their opinions may be suspect too. There are, sadly, a number of marketing and so-called social media ‘experts’ attempting to persuade naive accountants that they need a ‘social media strategy’. In fact the only people who will see any material reward for this ‘social media strategy’ will be the external consultants.

I accept that some generic definitions of Social Media would include LinkedIn. But it’s very different to twitter and Facebook as I showed in an earlier blog post: Comparing LinkedIn, facebook, twitter and ecademy. Yet facebook and twitter are the platforms most accountants and business people associate with the phrase ‘social media’. There are also other popular (and unpopular) social media platforms. But Linkedin is the only really business focused form of social media.

Do accountants use LinkedIn? Can they benefit from being actively engaged on LinkedIn? Or simply from being registered therein? Yes. Yes. Yes. Should accountants have a strategy to gain maximum benefit from Linkedin? Yes.

Does this mean there is a need for accountants to  adopt a wider ‘social media strategy’? No. Is the common disdain for Facebook or the concerns about twitter relevant to accountants’ use of LinkedIn? No. Could accountants benefit from other forms of social media? Yes. But each medium requires a very different approach and attitude. And none are as business focused as LinkedIn. So there is no need to rush this.

Tell me. Do you agree that it’s better to consider Linkedin distinct from other ‘social media’ or do you think accountants can benefit from a single social media strategy? Please share your views below.

PS: I have written a 10,000+ word book specifically for accountants who want to use Linkedin – either actively or passively. Click here for full details>>>

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Linkedin is quite distinct from other ‘social media’

I have made this point explicitly three times in the last 24hrs in response to different stimuli. It’s something I have also stressed in my talks, articles and blogs in recent years.

In my view you should be wary of anyone who simply references ‘social media’ in the context of accountants (or indeed other senior professionals). If they do not distinguish LinkedIn as distinct from other social media then they are probably insufficiently familiar with LinkedIn and/or accountants to be offering you advice. And the basis for their opinions may be suspect too. There are, sadly, a number of marketing and so-called social media ‘experts’ attempting to persuade naive accountants that they need a ‘social media strategy’. In fact the only people who will see any material reward for this ‘social media strategy’ will be the external consultants.

I accept that some generic definitions of Social Media would include LinkedIn. But it’s very different to twitter and Facebook as I showed in an earlier blog post: Comparing LinkedIn, facebook, twitter and ecademy. Yet facebook and twitter are the platforms most accountants and business people associate with the phrase ‘social media’. There are also other popular (and unpopular) social media platforms. But Linkedin is the only really business focused form of social media.

Do accountants use LinkedIn? Can they benefit from being actively engaged on LinkedIn? Or simply from being registered therein? Yes. Yes. Yes. Should accountants have a strategy to gain maximum benefit from Linkedin? Yes.

Does this mean there is a need for accountants to  adopt a wider ‘social media strategy’? No. Is the common disdain for Facebook or the concerns about twitter relevant to accountants’ use of LinkedIn? No. Could accountants benefit from other forms of social media? Yes. But each medium requires a very different approach and attitude. And none are as business focused as LinkedIn. So there is no need to rush this.

Tell me. Do you agree that it’s better to consider Linkedin distinct from other ‘social media’ or do you think accountants can benefit from a single social media strategy? Please share your views below.

PS: I have written a 10,000+ word book specifically for accountants who want to use Linkedin – either actively or passively. Click here for full details>>>

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Failed tax avoidance schemes and dissatisfied clients

How long does a client have to make a claim that they were missold a tax avoidance scheme that doesn’t work?

First of all, let’s remember that it can be many years before it becomes clear whether or not a tax avoidance scheme was effective. It may well have the benefit of Tax Counsel’s opinion that it is legal. That doesn’t mean it works. Tax Counsel will also have advised that, if all the facts in practice are in line with those in the ‘instructions to Counsel’, then “in his opinion” the hoped for tax savings should be achieved.  HMRC are likely to take a contrary view and the real position will only become known after the Courts opine on the matter.

The Court of Appeal recently pronounced on a tax scheme promoted by PwC TEN years ago. I am sure that back in 2001 or 2002 Tax Counsel gave the sort of advice I have summarised above.  Nevertheless this is the third time that the HMRC have won in the case of Howard Schofield v HMRC, as it has already been heard by the first tier and upper tier tax tribunals. The potential losses to the Exchequer, according to the media, were about £11m. (Actually the tax at stake was CGT on £10.7m).

It seems likely that around 200 other taxpayers who entered into the same scheme (being advised by PwC and Tax Counsel that it was LEGAL) will also be affected. The £100m or so of total tax they thought they had saved will now become payable plus interest. Whether they will be able to recover the fees they paid to PwC for the decade-old advice remains to be seen.

It would be naive to assume that all 200 taxpayers will now simply pay up the tax they thought they had saved. Some may look to claim that PwC did not give them adequate warning of the risks and caveats relevant to the tax planning involved in this scheme. The same thought will enter the heads of many other taxpayers who find out, in due course, that the Courts side with HMRC rather than agree with the Tax Counsel who blessed the tax avoidance schemes they paid a fortune to benefit from.

One tax specialist accountant I know now focuses on helping taxpayers who were missold tax avoidance schemes. The President of the CIOT recently indicated that he could see this day coming. It’s here already! Claims are being made against promoters and accountants (and financial advisers). Not just for negligent advice but also for retaining commissions contrary to the CCAB ethical guidelines.

The Spotlights page of HMRC’s website has long highlighted “tax planning advice to be wary of” (ie: where it seems to be too good to be true). And now we have HMRC’s latest publication: “Lifting the lid on Tax Avoidance Schemes‘. This confirms some of the points I have long been making re the risks inherent in certain aggressive avoidance schemes and the lack of certainty as to their effectiveness.

But let’s go back to my original question. How long do clients have to register a claim? The answer is ‘it depends’. It depends on their knowledge and experience. It depends on when they could reasonably have been expected to realise that their adviser had been negligent. A three year time period runs from that date. In the case of the PwC scheme referenced above, the three years may well have run out by the time of the Court of Appeal decision. This is probably academic as I am not suggesting that PwC were negligent. But clients may still allege negligence in the hope of recovering the fees they paid for the scheme.

I am doubtful that many dissatisfied clients will be able to recover the tax they now have to pay by alleging the scheme promoters were negligent. And this will be the same with almost all failed tax avoidance schemes. The reason is simply that the client is no worse off than they would have been had they not undertaken the tax scheme planning in the first place. Their only loss is probably the fees they paid for the advice and maybe the excess of the late payment interest they have to pay HMRC, over the investment return they achieved by holding onto the money in the meantime.

If you have clients who are waiting for the outcome of court decisions as to the effectiveness of tax avoidance schemes you may want to consider carefully how you advise them. And, indeed, whether you are competent to advise on this. And that brings me back to the Ten things accountants need to understand about tax schemes.

 Related posts

I have written a 10,000 word ebook drawn from my talk on How to avoid professional negligence claims, containing tips and risk management advice for accountants in practice. You can buy the book or download a summary for free here>>>

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Low value clients

This is a guest blog post by Jon Stow.  I’ve copied it here with his permission as it is a real life example of an issue I have often addressed in my articles and talks. It contains lessons for many accountants in practice. I’ve added some comments of my own at the end.

When you start out in business for yourself and are providing a service, there is a temptation to take on any client thinking it is all grist to the mill. Each new client will bring in a bit more money. I have been there myself and made mistakes. Part of reason for this blog is to share my mistakes so that others don’t make them.

Of course, low value clients are not just those who don’t pay you much money. Their low value is also because they do not appreciate what your business and you do for them. They accept what you might be doing for you as a commodity, not as a personal service for them.

Still, we can have some lapses and forget our lessons. I saw someone last year, and as she had a new start-up business I thought I would give her a really good starter deal for the first year to help her along and because (I thought) she would appreciate the gesture and we would build on the relationship.

So as it was time to deal with annual matters, though not all that long since we last spoke having dealt with the previous year issues late, I dropped her a line. I had a reply “I won’t be needing your services as my father has managed to do it for me for free”.

So that is me told, in no uncertain terms. She does not need my help or my technical expertise. She would rather rely on an amateur. The sweetheart deal I had already given her was not considered of even such value that she had the courtesy to tell me she did not want me again. She might have paid a fairer price last time if asked, but it is too late now.

There are lessons here:

  • Always bill what the job is worth.
  • Accept that some customers cannot see value in what we do, ever!
  • Some people are just discourteous and rude, but get over it.
  • Of course another lesson here is that we never stop learning. Have you had a slap in the face recently?

Jon notes that he wouldn’t normally have taken the client on. I wonder though how many accountants set a minimum threshold for new clients in terms of the first year fees, likely future fees, range of services required and so on? I was talking with an accountant at a function last night. He is one of 4 partners in his firm and he told me that they are only really interested in new clients who are likely to pay at least £3,000 pa. The firm is encouraging smaller clients to move to another local firm. Why? Well the ‘low value clients’ as Jon calls them, are generally more trouble to deal with, more resistent to additional fees and services and distract the partners and staff from providing full service to the more mainstream clients.

Every firm is different and there are plenty of smaller practices that would be very happy with clients paying an average of £1,000 (compared with the £3,000 of my friend from last night).

What is your attitude to ‘low value clients’?

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I now have thousands of followers on twitter. So what?

I’ve been on twitter since 2007 years and have watched my twitter follower numbers gradually increase over this time.

I think it’s fair to assume that my 5,300+ [edited Dec 2013] followers each fall into one or more of the following categories:

  1. Interested in me/my tweets – and forming part of my target audience of accountants and those who engage with accountants;
  2. Interested in me/my tweets – with connections to and the possibility of advocating me to my target audiences;
  3. Interested in me/my tweets – primarily to be inspired to replicate what I do, but for different audiences (Some might take this to extremes and just blatantly copy what I do);
  4. Interested in me/my tweets to some extent but principally because they know me in ‘real-life’;
  5. Hoping that I will follow them back – and build a relationship that will benefit them;
  6. Hoping that I will follow them back – either just to build up their own follower numbers or so that they can spam me.

I don’t know how many fall into each category. But the primary reason I don’t go chasing random followers is that this involves following random people – and their tweets would then clog up my twitter stream. I know I can filter them out (on tweetdeck or hootsuite) but they are probably doing the same thing. So we would both build up our follower numbers without anyone new seeing our tweets. So what’s the point?

Every now and then I check the new followers that show up on my twitter profile. The majority look  as if they fall into either categories 5 or 6 above. Some may really be in categories 2 or 3 but I suspect this is just wishful thinking.

If you’re following me on twitter and see this blog post do please let me know in which of the above categories you fall. If you don’t fit any of  them please let me know that too.

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How successful are the big firms' experiments with social media?

A new report (at the time of writing) suggests that most of the biggest firms are wasting their time and are not creating enough of a buzz through their social media activities.

The report from Flagship Consulting (a PR consultancy) “used a number of tools” to “measure brand activity” across twitter, facebook and firms’ websites and blogs.  The tools that Flagship reference are Hubspot’s marketing grader, Klout and PeerIndex.

questioned the methodology of PeerIndex recently after it recently ranked me in the top 40 finance tweeters in the UK. (At the time of writing it currently has me as 30th). I have similar concerns about Klout. In both cases I am doubtful that the measures they focus on are the most important for accountants using social media. In effect if one seeks to rise up their rankings one is led to follow behaviours that may not be best suited to accountancy firms.

Back to Flagship’s report which notes on p2 that, in response to a survey undertaken by CCH and YouGov, “just 9% of the 99 firms” [so that’s 9 of them] said “social media was the top method for bringing in new clients”. This is no surprise for sizeable firms but it helps explain their relative lack of commitment to social media – as revealed throughout the report. This stat is hardly likely to change. The bigger the firm the less likely that social media activity will be a key contributor to the winning of new clients.

E&Y come out top of Flagship’s analysis. Their twitter account, at the time of writing has >26,554 followers (despite following just 55 tweeters); taxassist, 2nd in the report has just 1,829 followers. The report stresses the importance of also considering engagement on websites/blogs and on facebook – but the difference is clearly massive. Regular readers will know that follower numbers on twitter are not the ‘be all and end all’. But any stats related to firms with less than a few thousand followers are relatively meaningless. For large firms the number of people who could potentially see their ‘stuff’ and with whom they can engage is surely key. If it’s low then the generic metrics, which may not mean much anyway, that rank social media players, are even less meaningful.

The report criticises firms that do not have active facebook pages and stresses the importance of also considering engagement on websites/blogs and on facebook. There is a good summary of the position on p20 of the report which reaches predictable conclusions – with which I do not wholly agree.

I did not see anywhere any reference to setting a clear strategy for building the firm’s brand on social media platforms.  When I discuss this issue with accountants I stress that an overarching ‘social media’ policy is less important than the need to consider each of the social media platforms that are relevant or likely to be relevant to your firm.

I have written before about the challenges for large firms experimenting with social media.

The biggest firms, like E&Y, can adopt a similar approach to other well-known big brands. This may well include engaging someone (internally or externally) to build a brand presence across the major platforms. But engagement is often key and that is the biggest challenge when the culture is not embedded in the firm.

At the other extreme, smaller firms are increasingly looking to engage with individuals who are themselves active on social media and who may be target clients. But for the vast majority it’s still all a bit of game. I believe there are ways to secure better results but they take time, money and a realistic strategy. Few firms have yet thought this through. They are caught in the hype promoted by marketing, PR and social media ‘experts’ who will be the only winners for some time.

Like this post? You can now obtain my 10,000 word ebook containing loads more Social Media related insights, short-cuts, tips and advice aimed specifically at accountants. You can buy the book or download a summary for free here>>>

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How successful are the big firms’ experiments with social media?

A new report (at the time of writing) suggests that most of the biggest firms are wasting their time and are not creating enough of a buzz through their social media activities.

The report from Flagship Consulting (a PR consultancy) “used a number of tools” to “measure brand activity” across twitter, facebook and firms’ websites and blogs.  The tools that Flagship reference are Hubspot’s marketing grader, Klout and PeerIndex.

questioned the methodology of PeerIndex recently after it recently ranked me in the top 40 finance tweeters in the UK. (At the time of writing it currently has me as 30th). I have similar concerns about Klout. In both cases I am doubtful that the measures they focus on are the most important for accountants using social media. In effect if one seeks to rise up their rankings one is led to follow behaviours that may not be best suited to accountancy firms.

Back to Flagship’s report which notes on p2 that, in response to a survey undertaken by CCH and YouGov, “just 9% of the 99 firms” [so that’s 9 of them] said “social media was the top method for bringing in new clients”. This is no surprise for sizeable firms but it helps explain their relative lack of commitment to social media – as revealed throughout the report. This stat is hardly likely to change. The bigger the firm the less likely that social media activity will be a key contributor to the winning of new clients.

E&Y come out top of Flagship’s analysis. Their twitter account, at the time of writing has >26,554 followers (despite following just 55 tweeters); taxassist, 2nd in the report has just 1,829 followers. The report stresses the importance of also considering engagement on websites/blogs and on facebook – but the difference is clearly massive. Regular readers will know that follower numbers on twitter are not the ‘be all and end all’. But any stats related to firms with less than a few thousand followers are relatively meaningless. For large firms the number of people who could potentially see their ‘stuff’ and with whom they can engage is surely key. If it’s low then the generic metrics, which may not mean much anyway, that rank social media players, are even less meaningful.

The report criticises firms that do not have active facebook pages and stresses the importance of also considering engagement on websites/blogs and on facebook. There is a good summary of the position on p20 of the report which reaches predictable conclusions – with which I do not wholly agree.

I did not see anywhere any reference to setting a clear strategy for building the firm’s brand on social media platforms.  When I discuss this issue with accountants I stress that an overarching ‘social media’ policy is less important than the need to consider each of the social media platforms that are relevant or likely to be relevant to your firm.

I have written before about the challenges for large firms experimenting with social media.

The biggest firms, like E&Y, can adopt a similar approach to other well-known big brands. This may well include engaging someone (internally or externally) to build a brand presence across the major platforms. But engagement is often key and that is the biggest challenge when the culture is not embedded in the firm.

At the other extreme, smaller firms are increasingly looking to engage with individuals who are themselves active on social media and who may be target clients. But for the vast majority it’s still all a bit of game. I believe there are ways to secure better results but they take time, money and a realistic strategy. Few firms have yet thought this through. They are caught in the hype promoted by marketing, PR and social media ‘experts’ who will be the only winners for some time.

Like this post? You can now obtain my 10,000 word ebook containing loads more Social Media related insights, short-cuts, tips and advice aimed specifically at accountants. You can buy the book or download a summary for free here>>>

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Accountants discouraged by ICAEW from advising on aggressive tax schemes

Although Tax Avoidance is no longer headline news we continue to see the repercussions of recent media stories. Last week I referenced the comments of the CIOT President. He suggested that there may be a need to consider toughening up the financial services mis-selling rules to attack the promoters and sellers of tax schemes that have no real prospect of working. I wrote about this here under the title: Is tax scheme advice comparable with investment advice?

Now it is the turn of the CEO of the ICAEW. Michael Izza has posted on his blog the most forthright comments I can recall on the subject. His words will shock some members of our profession. Although I would suggest that in the main these will be:

  • that minority who have been active promoters of tax avoidance schemes; and
  • those naive followers who enjoyed the commissions they earned and who have yet to realise that their blind faith in the promoters’ promises may not be justified.

Two years ago I wrote what turns out to be a prophetic piece on this blog.  It included the following:

“There are plenty of people who will tell you that you can generate a good commission whenever you persuade a client to ‘invest’ in a structured tax avoidance scheme. They are right. Such schemes are (usually) legal and fully disclosed to HMRC. So what’s the problem?

Let’s start with the need, for most qualified accountants, to comply with their professional body’s fundamental ethical principles. These include acting with integrity, objectivity and professionalism. Clearly this means only advising on things you understand and being clear that the prospect of commission is not uppermost in your mind when advising clients.  Of itself this does not preclude you from advising clients to consider structured avoidance schemes.”

I then set out seven key points that it is too easy to overlook when presented with an otherwise compelling proposition by an enthusiastic promoter of such schemes. You can read the full post here. Last week’s posts covered related points: Why weren’t all accountants promoting those tax schemes? and Ten things accountants need to understand about tax schemes.

It is now six years since I chose to give up being a tax adviser. One of the reasons I did so was an increasing concern I had re tax avoidance schemes and the ‘moral’ issues. Rather than impose my views on anyone else I simply stopped advising on tax issues. I therefore welcome Michael Izza’s recent comments and I was absolutely delighted to see such a clear statement from the ICAEW.  You can see the original here but I have copied it below to encourage debate here as well:

“I believe that there is no place for our profession in the creation or maintenance of these sorts of tax schemes.

As ICAEW Chartered Accountants, our code of ethics, which is the foundation for how we behave, is clear that we must do nothing to bring our profession into disrepute. Any members involved in aggressive tax planning through the sorts of schemes highlighted by The Times are doing exactly that, and are risking the reputation of the vast majority of our members who provide valuable and honest support to businesses and individuals and who want nothing to do with such schemes.

Looking at it through the public’s eyes, people find it hard to appreciate, let alone condone, the difference between avoidance and evasion, especially given the sums involved and the current economic situation. Anyone behind the type of tax schemes outlined in The Times must be aware that what they are dealing with is beyond the bounds of what is reasonable and responsible tax planning – all the more so if the schemes cannot be set out fully in writing or rely on information being conveyed orally.

In my view, taxpayers will increasingly want to be reassured that their tax affairs are dealt with in a responsible and professional way. ICAEW Chartered Accountants should be trusted to abide by our Code of Ethics and in the coming weeks we will be looking at what more can be done to reinforce that trust.

In these difficult times, any ICAEW Chartered Accountants who are engaged in the kinds of schemes highlighted in The Times need to look at themselves in the mirror and ask – am I upholding the honour and reputation of ICAEW Chartered Accountants and am I seen to be doing that? If the answer is no then they need to ask themselves whether they want to belong to our profession or not?”

As implied, I feel that my long-held views on the subject are vindicated and that the pressure on accountants to promote such schemes should reduce. Of course there will continue to be some grey issues and I know plenty of people will miss the point of Michael’s statement. It’s not anti tax planning. It’s not anti tax avoidance. It’s anti aggressive tax avoidance schemes.

I’d welcome your views and comments below.

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Where can Accountants network?

It seems that many accountants have experienced one form of local networking group and either decided that they like it or that it’s not for them. That’s fair although it would be a mistake to assume that all such groups operate in the same way. And it would also be a mistake to assume that there are no other options.

Perhaps the most popular formal business networking breakfasts are those run through local branches of National organisations such as BNI, BOB, BforB or 4Networking.  Others are run on a more ad-hoc (pay as you go) basis by local business associations, law firms or financial advisers. There are also lunchtime business networking groups such as the ladies only Athena Network and my favourite – NRG-Networks.

A quick web search for ‘business networking’ in your local area will invariably present you with plenty of choice over and above the National groups mentioned above.

Then there are ad-hoc events arranged by local law firms, financial advisers, banks or other businesses. Although not promoted as networking events, that is indeed what these occasions are even though you can invariably attend them free of charge. They tend to provide unstructured networking opportunities over breakfast, lunch or evening drinks, before or after a short talk or seminar run by the hosts. The events are typically focused on the firm’s clients. However they are also intended to enable the firm to promote its services and expertise to prospective clients and to influencers.

A local accountant will be considered to be an influencer as you may have clients who will one day need the host’s services. So these organisations want you to be there so that they can network with you!

How do you find out when they have events that you could attend? Easy! Go to their websites and join their mailing lists. These are most often used as the basis for invitations to their events. But you will also probably receive their email newsletters!

What experience have you had at business networks and networking events mentioned above – or indeed anywhere else?

PS: I have written a 10,000+ word book specifically for accountants who want to Network more effectively. Click here for full details>>>

If you would like to book me to speak on the subject at your in-house conference or training session, do get in touch. There’s an outline of my talk on ‘How to ensure your networking activity is successful’ here>>>  

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