In the aftermath of IRIS World 2016, it became abundantly clear that the accounting sphere feels frustrated and uninformed in relation to HMRC’s Making Tax Digital (MTD) initiative.
At IRIS, we’re determined to help you survive, thrive and conquer in an increasingly digital environment, and this key message was at the heart of our autumn 2016 roadshows, which took place in Crawley, Manchester, Newport, Sheffield, Southampton and Waltham Abbey.
Unsurprisingly, we received a higher number of registrations than for any other roadshow in IRIS history, with guests arriving keen to learn about an issue that will dominate their industry for the foreseeable future.
Each event was broken down into three areas:
- DISCOVERING how changing legislation, best practice and technological innovation are affecting your business in transformative times
- LEARNING about new strategies and processes geared towards increasing the growth and efficiency of your practice
- CONNECTING with fellow accountants and like-minded business-owners
How (and why) is demand for your services changing?
Based on current trends, the source of accounting income from consultancy services will continue to increase through to 2020 and beyond (in contrast to income from corporate finance, business recovery, tax, legal, and audit/accountancy, which has levelled out), and the primary reasons for this are threefold:
- Commoditisation of core services. Accountants being challenged to do more with less, HMRC’s Making Tax Digital directive, the rate of compliance change increasing and compliance ultimately becoming a commodity in the eyes of your clients.
- New clients, new expectations. By 2020, 75% of the workforce will be Generation Y (born between 1981-2002), computer literate individuals who have been raised in a digital world. Within 10 years, Generation Z (born 2003 onward) will become a large part of the workforce; these generations make up an increasing number of SME formations.
- New breed of competition. Digitisation and online technology is disrupting almost every traditional industry. Uber in transportation; Netflix in TV and film, Airbnb in accommodation, etc. This also applies to accountancy, where an online-only presence can keep prices competitive and make for low switching costs.
Your practice will need to embrace these changes sooner rather than later or risk losing ground. Take a look at these potential failings:
- Falling behind the competition today
- Ill prepared to compete in the future
- Slow to execute
- Quick to execute but slow to think, strategise and plan
- Slow to innovate
- Too siloed to collaborate
If any of the above accurately describe your practice, the time to turn this period of digital transition into an opportunity is now, as the initial Making Tax Digital beta phase kicks into gear in just a few short months.
Making Tax Digital timeline (and how your practice should respond):
- August 2016: Making Tax Digital consultation papers published. Analyse your client base; engage with & inform clients; review practice goals.
- January 2017: HMRC response to consultation papers revealed. Find out what effect, if any, accountant feedback has had on the specifics of Making Tax Digital.
- February/March 2017: IRIS Making Tax Digital Roadshows. Attend our second wave of UK-wide roadshows to find out the latest news, info and advice on all things Making Tax Digital.
- April 2017: Public beta opens for Self Employed Income Tax. Ensure all staff are trained up on Making Tax Digital and tools.
- April 2018: Self employed small businesses required to supply quarterly accounting info (#10k VAT threshold). Onboard first tranche of clients to Making Tax Digital.
- April 2019: Expanded to cover all small businesses. Onboard second tranche of clients.
- April 2020: Corporations now included. Onboard final tranche of clients.
The IRIS Engine: Always in Top Gear
An accounting firm powered by the IRIS engine will always be compliant with new legislation before it comes into force and capable of dealing with not only Making Tax Digital but also commoditisation, new generations of clientele and technological revolutions.
Deciding the correct next step for your practice is imperative, and throughout this hub you’ll find all the help you’ll need to deal with the changes effectively.