A New Year with New Horizons
Tuesday, December 15, 2015
As we put 2015 to bed and look towards a new year, the team at the CPAA is looking to the future and what it holds for the profession. With more legislation than ever, an increasingly digital world and a gradually improving economy, the industry faces an exciting but – excuse the pun – taxing 12 months ahead.
In this feature, we draw upon the decades of individual experience held by each of our CPAA Regional Chairs, to examine a selection of trends and issues that have the potential to impact on practices in 2016 – and the opportunities as well as challenges they may pose.
We have heard the terms ‘auto-enrolment’ and ‘staging dates’ for so long now that it hardly feels like this can be a new challenge unique to 2016. However, small employers are now waking up to their responsibilities (or not, and accountants are breaking the bad news!). The demands of auto-enrolment are finally hitting home and biting hard for many smaller firms. These are the businesses that very often lack the FDs and HRs that might co-ordinate pensions and as such will be looking to trusted advisors to act on their behalf. For accounting practices with the attitude and appetite to take on the mantle, this provides a big opportunity.
Efforts persist by HMRC to drive queries online and away from the phone, as the regulator reduces its resources and struggles in the process. It means HMRC is less able to guide businesses, which in turn provides a clear role for accountants to assist. The worry is that accountants may face picking up the pieces for businesses that have struggled with online procedures and need help correcting mistakes, or at the 11th hour. There is also the worry that lack of regulation for unqualified accountants will damage the credibility of the profession. And all of this comes at a time where practitioners are witnessing more investigations brought against small businesses, so 2016 is time for businesses to couple a robust attitude towards tax with a decent accountant that can help to avoid the HMRC spotlight.
Leading on from the point above, the demand for businesses to file multiple returns a year as part of George Osborne’s ‘digital revolution’, will no doubt create stress and anxiety. Apparently we will have one of the most digitally advanced tax administrations in the world – but you can bet that it will take a lot of hand-holding from accountants to get to a point where businesses are using digital systems confidently. It requires practices to be on the ball with digital systems, including cloud accounting, shared portals and new software. Nobody can afford to be left behind in the digital world. But those that keep abreast of this technology can profit greatly with no shortage of clients.
The upturn is starting to make itself really felt outside of London and major cities. This represents itself as an increased sense of confidence within businesses, a rise in hiring, and new start-ups entering the market. For CPAA members, especially smaller practices, this is a real opportunity for growth. So the beginning of the year is a good opportunity to review marketing plans with fresh eyes and consider how to capitalise on a more buoyant business landscape.
The Government’s Office of Tax Simplification is doing a great job at making tax simpler, but there is still a way to go. Much of the current legislation, for example that around domiciles, is particularly dense and complicated. As more legislation comes through there will be “more compliance to comply with”, so the wherewithal to wade through this is needed. Keeping on top of money laundering reporting and procedures is a real challenge that we often see; but there really is no alterative than to get up to speed with the regulations. Practitioners should avail of whatever training and CPD they can source to make sure they are on top of the changes. And crucially, look for the opportunity; if you are going to provide information and guidance to clients on legislative matters, be prepared to charge for it.
Competition is nothing new; it is a fact of business. But where practices have largely faced competition from other similar sized businesses, or sole-practitioners, now they face competition of a different scale. The accounting behemoth, KPMG, is now moving in on the small business market and the credibility that brand name brings should not be underestimated. Yet this is also the big boy’s weakness, the sheer scale of the organisation gives an impersonal feel and will never be a substitute for the relationships smaller practitioners can forge, and the local or specialist knowledge they can bring.
Increasingly the CPAA is seeing members being pulled in a variety of different directions to support clients. Accountants are straying from their traditional territory into other professional services arenas – and this diversity is enabling them to grow and offer a much more specialist service, which is a huge opportunity. For instance, probate used to be a solicitor’s domain, but there are practices venturing into this field as they manage an individual’s finances through their life and then handle their estate upon death. Be careful to only give advice where it is within your area of expertise though. Clients often ask for guidance and expect their accountant to be all-knowing on all areas of business, and in the spirit of being helpful the accountant may be tempted to reply “if it were me...” But as a trusted advisor, be wary that more may be asked of you than you can give and your word can be taken as official advice.
What is clear is that this is a profession that is constantly evolving; the industry isn’t straightforward (if indeed it ever really has been...) and will continue to change at a rapid pace. Sitting still is not an option, so focus on where you want to go this year and what you need to do to get there.
Look to the CPAA as a support network, our online CPD modules will keep you abreast of topical issues, and take part in our 2016 seminar programme. These regional seminars that run throughout the year offer both training opportunities as well as a chance to engage with your peers to vent, share and collaborate. Best of luck in 2016; may it provide you with far more opportunities than challenges!