With You At Every Stage
Is Your Accountant Actually Saving You Tax – Or Just Filing Returns?
Why This Question Matters More Than Ever
Many business owners assume that because their accountant files returns on time and communicates with HMRC, they are “looked after.” In reality, filing returns and saving tax are two very different services.
HMRC compliance ensures penalties are avoided. Tax planning ensures value is protected. Confusing the two often results in businesses paying more tax than necessary — without realising it.
Filing vs Advising: A Critical Distinction
| Filing-Focused Accountant | Advisory-Focused Accountant |
|---|---|
| Looks backwards | Plans forwards |
| Records historic data | Shapes future outcomes |
| Compliance-only | Strategy-led |
| Reactive | Proactive |
Both roles are legitimate — but only one actively reduces tax exposure over time.
Warning Signs Your Accountant Is Reactive
Many accountants operate on a compliance-only model without clearly explaining this to clients.
Common signs include:
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No tax forecasts
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No discussions around structure
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No director remuneration advice
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Contact limited to year-end
If conversations only happen after the tax year has ended, planning opportunities are already lost.
Missed Tax Planning Opportunities (Real-World Examples)
Timing Issues
Tax is often affected more by when income or costs are recognised than by the amounts themselves.
| Missed Timing | Impact |
|---|---|
| Late pension planning | Lost relief |
| Delayed expenditure | Higher CT |
| Dividend timing ignored | Higher personal tax |
Structural Issues
Structure determines how profits are taxed over time.
| Structure | Common Issue |
|---|---|
| Sole trader | Growth inefficiency |
| Ltd company | Poor extraction strategy |
| Group | Reliefs unused |
Many businesses outgrow their structure without reassessing it.
Profit Extraction Problems
Extracting profits inefficiently can cost more than corporation tax itself.
| Method | Risk |
|---|---|
| Excess salary | NIC exposure |
| Dividends without planning | Higher rates |
| Loans | Tax charges |
HMRC Risks of Bare-Minimum Accounting
Minimal compliance may meet deadlines, but it often leaves:
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Weak audit trails
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Poor documentation
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No enquiry defence
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Increased exposure during reviews
HMRC enquiries rarely focus on aggressive planning — they focus on poor records and inconsistent treatment.
What Proactive Accounting Actually Looks Like
True advisory accounting includes:
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Forward tax forecasts
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Annual remuneration planning
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Regular reviews
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Risk-based decision making
At Rothstone Accountants, accounting is viewed as a continuous advisory process, not a once-a-year obligation.
Final Thought
If your accountant only tells you what tax you owe after the year ends, they are filing returns — not managing tax.
Proactive accounting is about protecting value, reducing risk, and planning ahead.
Tax outcomes depend on individual circumstances. Professional advice should always be tailored.
