Eight Reasons to Change Your Current Tax Advisor

Navigating the complex world of taxes can be a daunting task for even the most financially savvy individual or business, which is why a good tax advisor is crucial. But how do you know if your tax advisor is providing the type of quality service that you deserve? In this article, we explore eight reasons why you may want to search for a new tax advisor. We also outline some important practical considerations, as well as what to look for when selecting your new advisor.

What does a tax advisor do?

A tax advisor, also known as a tax consultant, is a professional who specialises in tax law and regulations. Their primary role is to provide guidance and support to individuals and businesses in managing their tax obligations while maximizing their financial benefits. However, not all tax advisors are created equal, and there may come a time when you need to consider changing your current tax advisor.

But can you just change your tax advisor?

Before exploring the reasons why you should make the switch to a new tax advisor, it’s important to address the question of whether you can actually do so. The answer is yes. Just like any other professional service provider, you have the right to change your tax advisor at any time if you feel your needs are not being properly met.

Eight reasons to find a new tax advisor

There could be numerous reasons for you to consider finding a new tax advisor. Let’s explore the eight most common ones:

1. Lack of expertise

The titles “tax advisor”, “tax consultant”, and “trustee” are not protected in Switzerland, which means anyone can call themselves a tax advisor. This results in unqualified tax advisors offering their services to unknowing clients.

Tax laws and regulations are complex and always evolving. A competent tax advisor should stay up to date with these changes and have a deep understanding of how they apply to your specific situation. If you find that your current tax advisor is unable to properly answer your questions or is not knowledgeable about the latest tax regulations, it’s a clear indicator that you need to consider finding someone who is better qualified.

2. No personalised advice

Most tax advisors can fulfil their minimum duties of completing clients’ tax returns, along with other formalities. However, when it comes to offering sound, personalised advice, many fall short of the mark. Business owners and self-employed entrepreneurs are usually looking for ways to optimise their personal tax situation, which requires individualised attention from their tax consultant.

If you feel like your current tax advisor is not taking the time to understand your specific needs and is instead simply offering a “one-size-fits-all” approach, it’s time to consider finding a new advisor. A good tax advisor should tailor their advice and strategies to your individual circumstances to help you achieve the most optimal tax outcomes.

3. Too expensive

One major issue that you might be facing with your tax advisor is that their services are burning a deep hole in your pocket with exorbitantly high hourly rates and “surprise” costs. A good tax advisor is a highly trained expert, which does come at a price, but there are limits to what you should be willing to pay.

The typical hourly rate for a tax advisor in Switzerland ranges from CHF 100 to CHF 250, but some tax advisors charge as much as CHF 400 or more in extreme cases. It is important to understand that a higher rate doesn’t always mean a better consulting service. Rates which are more than CHF 250 / hour should definitely be viewed with caution.

Another common issue is non-transparent cost scales, where tax advisors add all kinds of extra, previously hidden fees to the final bill. It is important to clearly establish the fee structure with your chosen tax advisor in advance to avoid any surprises, and to choose a trustworthy consultant who provides you with transparent rates.

4. Inadequate communication and poor accessibility

It is essential that your chosen tax advisor is accessible and easy to communicate with. It can be frustrating if you find it difficult to reach your tax advisor, receive delayed responses, or feel that their explanations are unclear. Serious misunderstandings could also have damaging consequences with the tax authorities. A responsive and professional tax advisor is one that is accessible and readily available to address any of your concerns and keep you updated on important tax matters.

5. Lack of proactive tax planning

A proactive tax advisor does more than just mechanically prepare your tax returns and submit your tax documents for you. They should actively seek opportunities to legally reduce your tax liability, maximise your tax benefits, and optimise your overall tax position. If you find that your tax advisor is not actively helping you find tax-saving strategies or advise on long-term tax planning, it may be the time to switch.

6. Ethical concerns and lack of trust

Due to the sensitivity and importance of tax matters, it is crucial to work with a tax advisor you know you can trust. If you feel that your current tax advisor is engaging in any unethical practices, such as encouraging you to illegally evade taxes or providing advice which appears in contradiction with the law, you should act immediately. The consequences of such behaviour can be severe, both legally and financially. Finding an ethical and law-abiding tax advisor to protect your financial wellbeing is therefore of the utmost importance.

7. Errors in work and calculations

Unfortunately, it is all too common to end up with an unskilled tax advisor who makes errors in calculating your tax returns or in submitting your files to the tax office. This is unacceptable, as it can result in a loss of funds if deductions and rebates have not been properly accounted for. Even worse, it can end in penalties or even legal action with the tax authorities in serious cases.

8. Analog working methods

If your tax advisor still requires you to send in physical receipts and documents, you are probably in need of an upgrade! The days of cumbersome paperwork are long gone, and any decent modern tax advisor should have digitised their accounting services by now.

With digital tax services, you can directly synchronise your company’s internal accounting system with your trustee and thereby transmit important data in real time. So, if you have not yet done so, make sure you find a good tax advisor where digitalised service is the norm.

Practical considerations

While there are many good reasons to change tax advisors, you also need to consider the practical implications of doing so and plan the best approach accordingly. Let’s explore some of the most important practical issues involved:

Notice period

There is no legal requirement to give your tax advisor a period of notice unless it has been specifically agreed upon in your contract. If you are unsatisfied with their service and have lost confidence in their ability to represent you, you should be able to terminate your contract with immediate effect.

If you have previously agreed to a notice period with your consultant, adhering to it does ensure a smooth transition and avoids any potential conflicts.

Best time to change tax advisors

While you have the freedom to change tax advisors at any moment, its worth considering the timing carefully. Switching advisors in the middle of the tax year or during a crucial tax period may disrupt the continuity of your tax planning and preparation. If possible, aim to make the transition after your current advisor has completed the tasks he has started and doesn’t have too much work pending. This will help to minimise any potential complications and avoid additional costs.

Informing the tax authorities

The tax authorities don’t have any direct interest or say in who advises you on your tax matters. However, you must certainly inform them if you change your tax representative. Your tax advisor has power of attorney over your tax matters which needs to be revoked when you make the change. The tax office also needs to know to redirect future correspondence and filings to your new advisor to avoid any errors or delays.

Cost of switching tax advisors

Typically, changing tax advisors does not initially result in additional costs or fees. However, if you make the change when the previous advisor is in the middle of an open task, such as preparing your tax returns or balance sheet, you may incur double costs. This is because your previous advisor will charge you, either partially or fully, for the unfinished service, and you will then have to pay your new tax advisor for the same task.  Try to optimise the timing of the transition to avoid unnecessary double costs.

Handing over of tax documents

When you change tax advisors, your old tax advisor will have to facilitate the transition by transmitting your data and tax documents to your new tax consultant. Speak to your new tax advisor for guidance on the best approach to handling the changeover, and what data they require from your previous advisor.

It’s crucial to maintain the continuity and accuracy of your tax information, and a professional handover ensures that nothing is missed or overlooked. Try to remain in good standing with your previous advisor, ensuring that all your bills are fully settled. If you have outstanding debts owed to them, they could refuse to handover your tax data until they are settled.

Your new tax advisor will likely need the following:

• A presentation of your financial situation.
• Annual accounts, including income statements and balance sheets for the last three years.
• Statement of accounts including fixed assets.
• List of open items with customers and suppliers.
• Business reports.
• Employment contracts and agreements, including pay slips, social security contribution statements, and wage tax registrations.
• Income tax returns for the current and previous years.

How do you find a new tax advisor?

When searching for a new tax advisor, you should be clear about what qualities you are looking for. Knowing where your previous tax advisor was lacking, and what you expect out of your new tax advisory relationship, can help ensure that you choose the right tax advisor the second time around.

Here are some factors to consider when selecting a new tax advisor in Switzerland:

• Qualifications and experience: You should look for a tax advisor who has the appropriate qualifications and experience in Swiss tax regulations. Good indicators are professional certifications, years of experience, and specialisation in areas which align with your specific requirements.
• Reputation: Examine the reputation of the tax advisory firm or specific tax advisor you are considering. Try to get recommendations from trusted sources, such as friends and family, or professional networks. You can turn to online reviews to get a better idea of their track record and client satisfaction.
• Communication and trust: Trust and a good working relationship are vital when dealing with sensitive financial matters. Schedule an initial consultation with the advisor to decide whether you communicate well and feel that they are trustworthy and responsive.
• Fee structure: Inquire about the tax advisor’s fee structure upfront and make sure it matches your budget and expectations. Consider the value you will receive from their services and the potential savings they can provide, and weigh these against the costs.