Byline by Roan Lavery
Although it has been two years since the UK left the European Union, the impact of Brexit is still being felt across the UK. From increased red tape and trading requirements to issues with logistics and supply chains, many businesses throughout the country are finding themselves dealing with new challenges in post-Brexit Britain. .
At FreeAgent, we’ve been looking specifically at the impact of Brexit on the UK’s accounting sector to better understand how the landscape has changed, how accountants are helping clients through the challenges and how they are preparing for the future.
Brexit and Accounting
Our most recent research suggests that the impact of the UK leaving the EU remains an ongoing issue for the accountancy profession – with 83% of accountants saying they believe the profession has changed due to Brexit, and nearly half (47%) of accountants saying they think the ramifications of Brexit are still unclear.
Many small business clients are now requiring help to navigate through increased red tape and higher costs associated with leaving the EU, but there also appears to be a growing need for accountants to help clients navigate wider economic uncertainty. The research found that accounting professionals had seen an increase in guidance (83%) and planning requests (73%) from their clients, in particular, as a result of Brexit.
Additionally, nearly half (47%) of accountants surveyed said they believe that Brexit has impacted their role to some extent, with more than a third (37%) believing that it has had a positive impact on the profession compared to the 10% who think Brexit has had a negative impact. We also found that there has been a 69% increase in client requests around managing working capital since the UK left the EU, while similar increases have been seen for requests about complications around UK financial reporting standards (68% increase), and forecasting (68% increase).
Ultimately, it appears that small business clients are increasingly looking for guidance as the UK navigates its new position outside of the European Union, with accountants being seen as key experts to provide this advice. The increase in requests across the board also suggests that further opportunities may arise for accountants as the UK continues its post-Brexit journey in the coming years.
Future-proofing accountancy
It’s not just Brexit that is currently having an impact on the accounting profession. When asked about the top issues that accountants would be advising clients on in the coming year, nearly half (44%) highlighted Covid-related legislation, while 42% picked the tax implications of sustainability and 39% chose the government’s flagship Making Tax Digital (MTD) legislation. We also discovered that, in order to prepare adequately for the future, one in three (33%) accountants said they thought that gaining an understanding of newer technologies would be the most important factor for future-proofing their role.
Other big issues impacting the role of accountancy include the ability to strategically identify areas of growth (52%), learning about new technologies such as app integrations (56%) and developing technical skills (49%). These elements will be – and in many cases already are – essential for the future of the profession amidst the implementation of the biggest shake-up to the UK’s tax system in years, MTD, as well as ongoing economic uncertainty caused by Brexit and an unstable political situation in Westminster.
Over the coming years, it’s likely that accountants will need to be prepared to identify new strategic areas of growth and ensure they are consistently up-skilling themselves and their practices – whether that’s training offered by professional bodies, integrating new technologies, using online resources or networking to expand their knowledge and connections.
We know many accountants are already actively working to future-proof themselves and their practices in the years ahead, by adapting to an increasingly digital world, offering new levels of service and positioning themselves as invaluable experts who can deftly help their clients meet new legislation.
Those who are not currently looking to the future, however, will need to step up and ensure they do so quickly – so they are best-placed to successfully navigate any challenges that arise over the coming years.
Roan Lavery is CEO and co-founder of FreeAgent, who provide award-winning accounting software for accountants working with small business clients.
