Professional advisers
The good, the bad, and the downright ugly
Professional advisers - the good the bad and the ugly.
A few weeks ago we looked at how a first year partner in a family farming partnership could use pension contributions in a very tax efficient way, if they acted quickly. This is exactly the kind of thing you would want your accountant to tell you about, if you found yourself in those circumstances.
Maybe they did. But what if they aren’t going the extra mile for you?
Today we are going to look at a thorny issue—when is the right time to replace your accountants?
Sage words?
My father-in-law had a particular view of accountants, lawyers, bankers and other professionals.
“There’s very little good in the professions.” he would always point out when I came for Sunday lunch back in the day. At the time, I was a fresh-faced young chartered accountant, and member of the Institute of Taxation, but he was the patriarch of the family farm partnership, and I knew better than to try and contradict him. Of course, I didn’t agree with his views—surely we weren’t all that bad?
I have been out of the profession since the early 2000s, but over the last two years I have been heavily involved in all aspects of taxation affecting the family farm. I have seen up-close how a fairly large firm of accountants (one with an agricultural specialism) has treated the family farming partnership, and I have to say I am deeply shocked. They have now been removed as the farm’s accountants. I’m sad to have to say it, but my father-in-law’s views at lunch all those years ago have proved to be correct in their case.
I wanted to share some lessons that we have learned from dealing with them over the last couple of years, in case it helps anyone else out there wondering whether their advisers are really giving them a proper service.
Chances are you will know in your bones if they are or they aren’t. However if you aren’t really sure, I have a simple rule of thumb that you might find useful.
Three strikes
I am going to suggest a simple rule: “three strikes and you’re out”.
Everyone makes mistakes from time to time. That’s why I would never suggest replacing advisers after making a single error—unless it was completely catastrophic. In the normal scheme of things, everyone can forgive a first mistake. Actually, you would expect it to have a positive effect: a little more care and attention going forward.
A second mistake is more of a worry. But a third is too much of a cause for concern, and for me, that would be a trigger for changing advisers.
That’s why I think “three strikes and you’re out” makes a lot of sense.
What do I mean by a mistake/error in this context? You’ll know it when you experience it. It could be something that has an adverse cost impact for the business—eg a failure to claim relief on a cost where there is a good argument for relief. It could even be something that annoys you ‘on repeat’—an inability to return a phone call or reply to a question in a sensible time period.
I’m going to illustrate this using some real life examples of the service the family farm partnership received from those accountants.
Accessibility
If your advisers just aren’t that accessible, it is really annoying, and a big problem. Not unreasonably we wanted to be able to speak to our advisers. You might imagine that would be straightforward, but if they make it impossible to get through to them, you will know it. The signs are obvious: they never answer their phones. Voice messages left asking for phone calls to be returned are ignored. Emails asking for a call are ignored. The icing on the cake: we ended up in a weird situation with one of the team where he seemed reluctant to actually take a call until he was told in advance (by email) what the call was about. It all became a bit surreal.
All we wanted was to be able to talk to a person at the end of the phone without any fuss. Is that asking too much?
I don’t think so.
In my book, that’s Strike One.
Turnaround time
What should you expect as a reasonable turnaround time while waiting on advice? One week? three weeks? Ten weeks? Incredibly, it took the accountants ten weeks to reply to a question on CGT Rollover Relief. It took regular chasing and finally a complaint to the senior partner of the office to actually get a response. You would have expected that a response that took ten weeks to deal with would have been mind-bendingly brilliant. Sadly that wasn’t the case.
We simply wanted to receive advice in a reasonable time frame. If something was complex and was going to take some time, we just needed to know up front so that we could plan properly and see if it going to have a knock-on impact on any transaction deadlines. They really dropped the ball on this one.
So that was Strike Two. One to go….
Actually caring about you/ being proactive
Some advisers are much better than this than others. You can probably guess where our hapless bunch fitted on the spectrum.
One example illustrates the problem. Remember the October 2024 budget? This was Rachel’s first attack on farming families, capping 100% IHT relief for the first £1m of farm assets. These changes represented an existential threat to farming families. Would it be reasonable to expect a call or the suggestion of a meeting to discuss the proposed changes? You might have thought so. Did they do that? Not a word of it. No call, no email, no letter, no nothing. It was as if the budget hadn’t happened.
To my mind, that was completely unforgivable. What’s worse, when we got in touch to get them to look at a tax issue on a specific transaction unrelated to the budget, the reply came back in an email from the partner, and I quote:
“Just wanted to acknowledge your email.
As you can imagine, we are exceptionally busy post budget”
Exceptionally busy!
Just not on helping us.
That’s when we realised just how little they valued the family as a client.
That was Strike Three.
That should have been it
Now that should have been when we looked for new advisers, but we didn’t — because it is really difficult to know when to do that without a framework. The ‘three strikes’ rule only came later. It was a mistake not to act sooner on this, because it meant more strikes were about to rack up.
Let’s look at those briefly.
Completion of 2024/5 partnership tax return. Left woefully late and too close to the filing deadline, with little time to discuss areas of contention: Strike 4.
Agricultural specialism—something we wanted to tap into on a specific query, but the team were unable to provide: Strike 5.
Billing: when the bill came, it was a complete surprise how high the number was. It shouldn’t be: Strike 6.
Changing the advice: Have you ever sat in a meeting, received advice on a matter in the room, and then a week later received an email starting “Having consulted with colleagues…” to find that the advice has changed. Frustrating. Strike 7.
Who was on the team: two partners, but neither was a specialist tax partner. The balance was completely wrong. Strike 8.
You get the picture.
If you find yourself in a similar position, maybe a three strikes approach will help you.
When to ask for advice
I know from experience that it can be difficult to know when to ask for professional advice.
Here’s my recommendation. Any time you are about to do something new in your business—a new project, an acquisition, a disposal, anything you haven’t done before, then you should be asking for professional advice. Life is complex and when you enter into a transaction that is out of the ordinary for you, the chances are it will have tax and legal complexities.
If something is new to you, you should get it checked out—just like you would do if you noticed a new mole in the mirror while brushing your teeth.
Next time
I am a lucky chap. I am heading off to Italy and am going to be away until the end of June, so I will be pausing the blog until I get back.
I will then start a series of blog posts looking at all the issues around incorporating a partnership.
Arrivederci and see you soon!