It is sometimes very difficult for a business to know if the advice they are receiving is good advice. We met with a client who were very happy with their existing accountants who had even won awards for their tax advice. We, therefore, suggested that it was unlikely that we could assist but started by looking at a particular letter from their accountants advising how to reduce their tax bill. This was done as a one-off piece of work as there was no intention to move accountants for other services. The letter we received was some 6 pages of prose that was a joy to read. It was instantly apparent that we could not compete on a literary level! However, once studied, it simply said put your money in a pension! To make matters worse the example of how this would save tax did not add up!
To enable our client to have some perspective we set out 8 different areas where tax could potentially be saved for the client to go back to their advisor with. They did exactly that and received another beautifully written letter agreeing that these were some good ideas but perhaps putting their money in a pension fund was simpler! At this stage they were happy with the advice we had given but would pursue this with their accountant and we billed the agreed £500 for the general advice given. They then received a bill of nearly £2,000 from their current accountant for the “tax advice” given.
Having gone back to our suggestions and clarified their existing accountant’s advice they decided to move to us for all their accounting requirements. We were able to save tax in a number of the areas we suggested as well as assist with a restructuring of the business to safeguard assets and reward employees. The fact we were able to assist in a new claim for Research and Development tax credits was then merely icing on the cake. This only goes to show that appearances can be deceptive in many areas but especially in professional advice.