What type of client do you have?
Regardless of what the tax problem may be, clients can make my job easier (and thereby quicker to resolve most of the time) or not.
In my opinion, we all put people in different boxes so to speak. I know I do. But I would like to pride myself on the fact that I leave the lids off so that they can be moved from one box to another… And sometimes back again.
I suppose I have 3 types of client boxes:
Perfect. Up to a point.
It can make my job so much easier in capturing the background information of the journey the taxpayer has experienced so far, what the problem is, and how it may be resolved.
However, they can be a nightmare in any meeting with HMRC. Not because of what they say, but how much they say. Without being too much of a control freak, briefing clients on what to say and what not to say is critical. By all means give a full answer to any question, but don’t give your life story. Or what I call “gratuitous information”. HMRC will not be blinkered in their investigation, and you may just say something that changes the course of the investigation.
I have had many clients like this over the years.
From this I have learnt is that no two tax investigations are ever the same. Indeed, how one tax investigation impacts on two parties can be quite diverse, for example an investigation onto a company run by two Directors.
Even husband and wife can have different profiles.
The trick here is knowing what questions to ask.
If you have all the people together (i.e. all the pieces of the same jigsaw) in one room, then you may have the full story.
That is why sometimes it may be necessary to involve not just the accountant, but the solicitor, the best friend et al.
This is necessary if ever you want to know the full story.
In turn, each group can have other challenges. For example, how do you convey the information or explain what you have learnt to HMRC.
Do you quote the source – “according to the Directors, … … …”?
Has HMRC come to a view already as to what sort of taxpayer they are?
Is that the same as your view?
Depending upon which box your client may be in, how you communicate can be a challenge as well.
Putting this in writing gives you the opportunity of portraying what your client wants in the best terms and allows you to reflect and amend to your heart’s content.
A telephone call puts you more on the spot. A video call shows physical reactions to what has been said and is clear to see.
HMRC have training on how to conduct themselves in various scenarios, so do their advisers. Clients/taxpayers do not. Sometimes a tax dispute is akin to playing poker. Who has the winning hand?
In a meeting with HMRC (no matter how much you prepare and almost rehearse what questions may be asked and what answers may be given beforehand), there are some people that simply hate the sound of silence. They feel compelled to fill that silence by talking. Talking about anything and everything. What they should really consider is thinking and maybe talking. There are occasions when HMRC have lost their argument and need to rethink and regroup. And hey presto, they are told a snippet that they may not have thought of, and it’s just been volunteered by the taxpayer on a plate.
“That’s interesting, please tell me more,” says HMRC.
Whilst I don’t condone physical violence, I can imagine why there are often kicks to the ankle under the table. We were doing oh so well, and now we are off in a different direction.
It’s not always what clients say in a meeting. It can be the paraphernalia they bring along in support. By all means have an Agenda, have some bullet points/key words/prompts and any records, but beware because HMRC may ask for copies.
So, what can be drawn from this article?
Know your client. Really know how your client, specifically how they will behave in different circumstances.
If you fail to plan, plan to fail.
Make sure you rehearse all eventualities. Make sure your client knows when to think and when to talk.
…What type of clients do you have?