Offering an annual tax compliance service to private clients can be profitable.

But if it is to be cost effective appropriate management systems must be running within the solicitor's office.

Once tax self-assessment arrives more people will be seeking professional help to complete their tax returns.

Solicitors may decide to complete these on behalf of clients and leave the Inland Revenue to assess.

However, this will increase time pressures on the practice as returns will have to be completed, sent to the client for signature and submitted to the Revenue by 30 September each year.A better approach is to be prepared to calculate the tax for clients, which will leave until 31 January to send the forms to the Revenue.

Penalties for late or incorrect returns are automatic and fierce and organised work plans are therefore vital.

Regularly checking the flow of letters and organising files should ensure that important deadlines are not missed.New clientAn appropriate engagement letter is essential.

This should set out the responsibilities which the solicitor is prepared to take on for the client and specify that the client's own responsibilities lie in the accuracy of the information included on the return.

Also detail the time limits and penalty regime within this letter.

When sending this to the client -- together with a copy for signature and return -- include a 64-8 (Inland Revenue form of authority) so that the solicitor can make contact with the inspector of taxes.

When this is sent in request a copy of the last tax return submitted so that the sources of income already declared by the client can be checked.QuestionnaireSend a personalised questionnaire to the client, requesting all the information that will be required and asking for any additional details of new in come sources, eg allowances claims and capital gains.

This can be timed to arrive on the client's doormat on 6 April at the same time as the tax return form from the inspector of taxes.ManagementIt is advisable to keep a list of all clients who have received a questionnaire.

When the information is received, acknowledge receipt to the client and note the list with the date of receipt.

Any passbooks or other current documents sent in should be photocopied and returned immediately to the client.

When the return has been prepared and sent to the client for signature, the list should again be noted and it should be finally cleared when the return has gone in to the Revenue.

This list should be reviewed weekly to ensure that things continue to move.

If the solicitor is using one of the more sophisticated tax return computer software packages, some of these reporting functions may be included.Tax return completionThere are many software products on the market which will make this a simple task.

After the first year there is no doubt that they will generate considerable time savings.

In addition, the facsimile return saves secretarial time.

The programs are also designed to calculate and print out a tax liability computation.

This can be used to advise the client of pending liabilities.Planning pointsSending the return to the client for signature gives the solicitor a valuable opportunity to present planning points, particularly with regard to capital gains and inheritance tax.Follow-upsOnce correspondence has gone to the client or the Revenue and a reply is expected, it is advisable to keep a copy of the letter in a follow-up file.

This file should be reviewed weekly to check whether replies have been received and reminder letters should be sent to clients after four weeks.FilesIt is advisable to keep a separate tax file.

This should be separated into a section for correspondence and a section for more permanent details, as well as separate clips for copies of tax returns and copies of assessments.

It is easier to keep track of assessments in this way and to ensure that the one on the top is the very latest copy.

There should also be an up-to-date computation of the total liability kept with the assessments.

This allows the main body of the file to be weeded once a year, removing old letters.BillingSome clients may prefer to pay a fixed fee for having their returns prepared.

This fee needs to be quoted annually and in advance.

The invoice can be sent to the client on the same day as the return is filed and this will help with budgeting.Self-assessmentIt appears that the pay-slip from the collector may not be sent to agents unless this has been arranged beforehand.

It would seem prudent to do this so that all pay-slips come through the solicitor before going to the client.

Again, this is best controlled by lists so that all clients are forewarned of their payments on account and no payment dates are likely to be missed.