As I was leaving our office in Inverness one evening last week, I found something on the stairs that set me thinking.
Many years ago, a client came to see me in our Kirkwall office. Now, he had a very small business. He repaired cars and occasionally sold one or two, but all from his workshop which was at his house. He was probably nearing retirement at that time and had worked from his home workshop most of his working life. So as far as his accounts were concerned, the numbers were not big, but you could not help wondering if he told us everything. However, if anything was missing, it was not large, so I don’t think the government would have noticed the missing tax, if any.
Anyway, this day he came in to see me and during our conversation, he said that he had just come from the dentist, and on the whole “would rather still be there”. I did not take it personally. I took it to mean the dentist was either stopping existing pain or preventing one from starting. I was causing him pain by talking about declaring his profits and actually having to find the cash to pay his tax. The fact that we were keeping him on the right side of the law did not seem to be of any significance.
Anyway, what I found on the stairs was a sticker. It said, “I’ve been brave”.
So, let me ask you a question. Do you need to summon up the courage to come and see us, and if so, should you earn a “I’ve been brave” sticker to wear for the rest of the day.
I suppose there are probably two principal reasons why you might shy away from visiting your accountant. Just like regular checkups at the dentist, dealing with us prevents future pain and grief, but nobody likes discussing their personal or even their business finances. It’s a bit like getting your homework marked when you were at school. You may feel that your performance is being judged and might imagine an unspoken question like “Why have you not made more profit”. I can say that this is almost never the case as every business is different, and anyway, if we think you might be able to improve your profits, we will give you pointers on where to start. However, it does not matter that people tell you that this stuff is important, it’s still not fun for most people.
The other reason is that the tax system is so complex. You probably feel that you do not have a full understanding of the tax system. If you work in tax, as we do, you realise that nobody has a full and proper understanding of the tax system. If you speak to someone from HMRC they will generally only deal with one tax, whether that be Income Tax, Corporation Tax, VAT, IHT and so on. Your affairs may span all these taxes and so we are expected to be able to assist across the board. It’s one of the aspects of our work that is most challenging, especially as the rules change, sometimes almost daily. The challenge for us is to keep on top of these changes. It’s a bit like riding on a galloping horse. Sometimes you just need to hang on for the ride.
The government set up the Office of Tax Simplification many years ago. The OTS has produced many reports and suggestions over the years, and the Westminster Government has implemented many of these recommendations, However, they then add layers of complexity faster than they introduce simplifications so the challenges increase.
It is a basic rule that you cannot add simplicity, you must remove complexity. Government seems to be oblivious to this rule. I am afraid that all of our lives are becoming far more complex and there seems little that any of us can do to reverse the trend.
However, remember that we travel this road together and anytime you need us, just pick up the phone. We may not know all the answers right away, but we know where to look. So, be brave! You never know, you might even get a sticker.
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Alan E Long
The Long Partnership