Is the recession a reason to be more proactive with clients?

Nov 12, 2022 | Client service, Sole practitioners

The latest economic predictions in the UK prompted me to consider ways in which accountants could be more proactive as regards their clients. As so many were at the start of the pandemic in 2020.

The technical definition of a recession, as we know, means two consecutive quarters of negative growth. The relevant figures are updated monthly which is why it takes time to have certainty on such matters. But either way, many business owners are understandably concerned about the outlook.

I know that some accountants hold back from being proactive with clients unless the fees they get paid warrant this approach. An alternative stance involves proactively flagging opportunities and ideas in general terms and agreeing a fee at such time as clients choose to engage you for specific advice.

“How’s business?” is a simple question that can generate answers revealing the need for your advice and guidance. This might include access to business finance, or finance on better terms than the client can source without your help. Cashflow reviews and projections are also more important than ever. Formal business reviews and analyses are also something many clients cannot do without help from their accountants.

There is also, as always, a range of generic tax saving ideas that you could mention to clients.

Remember they won’t know you’re thinking about ways to help them to save tax if you don’t tell them. Face to face (or via zoom) is best; otherwise at least in emails and newsletters that you send to them.

If you’re a regular reader you’ll know that I stopped giving tax advice in 2006 but I was still able to come up with a short list of simple tax ideas off the top of my head. Most are obvious of course, or are they? And are you sure that your clients all know that you have considered how they might benefit from these ideas?

– ensuring that clients are claiming all allowable business related expenses as deductions from their taxable income;
– moving suitable clients onto the VAT flat rate scheme and reducing the VAT they pay each quarter;
– maximising the claims for capital allowances;
– securing early relief for trading losses;
– taking advantage of the tax free benefits in kind that even owners of their own company can have;
– reviewing the balance of salary and dividends paid out of their own company;
– registering for tax credits so as to ensure they can get maximum amounts if their income is lower this year than they had hoped;
– claiming all available allowance and reliefs;
– switching to a car that qualifies for additional tax reliefs (in terms of the offsets available against business income);
– seeking a repayment of the sums paid on account in January and July this year if their tax liability for 2008/09 is likely to be lower than it was in 2007/08.

There are also ways to plan to reduce other taxes too – such as capital gains tax mitigation, inheritance tax planning and the taxes that can arise when reorganising groups of companies, such as on demergers or sale. Falling share and property values actually present specific tax planning opportunities for the wealthy – in terms of CGT and IHT, also for those companies wanting to incentivise staff through share option schemes.

Not all accountants have the necessary specialist expertise to advice on such matters. And, once you go beyond the basics, it’s rarely low cost advice so it’s not for everyone. Many accountants outsource such specialist tax expertise. And that’s another win:win opportunity in the current economic climate.  It must be more cost effective to use the services of vetted independent tax advisers than recruiting or replacing full time in-house tax experts.

More info at: (where you’ll also be able to sign up for a free weekly practical tax update written especially for accountants in general practice).

So, going back to the heading to this blog post. Are you making plans to use the recession as a reason for being more proactive with clients?  There may be fewer people willing pay good money for advice, but if the cost/benefit equation is right then there’s no need for accountants to worry. Service and value for money are as important as ever.

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