accountancyandtaxupdate-blog

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Businesses watching politics with “resignation” as battle for PM hots up

Businesses across the UK are hoping for a speedy resolution to political dramas as they make preparations for Brexit, KPMG said. They want to know if ‘no deal’ will soon be back on the table, and are watching political developments with “resignation”, according to KPMG. Theresa May’s announcement that she will step down on June 7 has sparked a clamour for the top job with 10 MPs putting their names forward, including favourite Boris Johnson. However, businesses are urging politicians to sort the process to out quickly. “The Brexit holiday that businesses might have been enjoying is now over,” said James Stewart, Head of Brexit at KPMG. “Few businesses are in the mood to make further provisions at this stage and most hope that the leadership contest will be over quickly.” Many of the candidates have tried to appeal to the most extreme Brexiteers in the party like Mark Francois and Jacob-Rees Mogg and believe that in order to win the leadership contest, ‘no deal’ must be the default position of the government. Work and Pensions Secretary Esther McVey told Sky News on Sunday that “the best thing we can do is prepare to leave with no deal,” while former Foreign Secretary Boris Johnson told a conference in Switzerland: “We will leave the EU on 31 October, deal or no deal.” Another leadership hopeful, Andrea Leadsom, told the BBC that the UK should leave without a deal “if necessary”. Brexit impact already apparent Meanwhile, Brexit is beginning to have an impact on businesses even though the UK has not yet left EU. “A lot of the focus has shifted towards businesses’ own supply chains. Not just manufacturers of goods, but also the lenders and financial services firms in the chain so that they identify any potential weaknesses,” said Stewart. “Retaining people with the right skills is another area of concern, given the uncertainty around the new immigration rules. Fruit pickers for example have been late in arriving and not in the usual numbers,” he added. With all the potential permutations that Parliament could throw up from ‘No Deal’ to a second referendum or even a General Election, businesses crave certainty. “Above all, businesses tell us that Brexit remains a huge distraction. They are reluctant to waste too much effort, but the worry is that they will implement their plans at the last minute and delay important investment decisions,” said Stewart. The post Businesses watching politics with “resignation” as battle for PM hots up appeared first on Accountancy Age.

https://www.accountancyage.com/2019/05/28/businesses-watching-politics-with-resignation-as-battle-for-pm-hots-up/

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“Businesses are better with an accountant”

It has been a big year for Xero. With 463,000 subscribers in the UK alone, the software company is now no longer a niche small business product and fast becoming a household name. In its yearly results, announced recently, the company cemented its position as the largest provider of cloud accounting software in the UK, notably taking share from some more established providers. In part driven by Making Tax Digital, Xero subscribers increased by 151,000 in the past year, with revenue growth of 50%. Speaking to Accountancy Age at Accountex, Xero’s director of partner and product Damon Anderson said: “Cloud accounting is now absolutely mainstream.” And while TV adverts targeting small businesses may have led some accountants to fear that technology will cut them out of the process, Anderson is clear that accountants remain central to the Xero business model. “We are accused of not understanding accounts, but 30% of our employees are AAT qualified accountants,” he said. “We believe this industry is crucial to the future of the UK economy. We want to enable accountants.” Five big challenges Xero research has uncovered some worrying figures however. Of business owners surveyed by the company, 70% said they wouldn’t recommend their adviser. Twenty-seven percent are actively looking to switch. Reasons given include that they want more proactive advice from their accountants, and crucially, business owners said they wanted more industry knowledge from their accountants. Xero has identified that accountants themselves face five big challenges as the profession moves forward: Finding good clients Finding skilled staff Keeping up with apps and tech Making sense of the advisory role Lack of cloud-based practice tools But Anderson does not believe that the transformations being wrought by technology and the move to a more advisory role will cut out the compliance accountant completely. “Small business owners don’t get into business so they can be accountants,” he said. “All the errors they would typically make are so they can get on with running their business.” Xero’s position is that compliance, as new regulation comes into force such as MTD, is growing rather than diminishing. The company is working on products which will assist with filing other kinds of tax, including corporate and personal tax, directly to HMRC for when digital record keeping and filing becomes mandatory. One model he suggests that accountants could adopt is to use the time efficiency savings being made possible by technology to take on more clients. “Technology is changing all industries – people have to adapt,” he added. Making sense of the new skillset required is one challenge; figuring out which technology to use in a complex and ever-changing landscape is another. More than 750 apps feed into Xero, and more than 50,000 developers are using Xero data and building new products. “The biggest challenge is how do you keep up with that,” Anderson said. “If you look at Netflix, they serve up the best entertainment and change the pictures according to what the viewer has watched before.” This personalised approach has been adopted by Xero, which has created an App Integrator Programme. The programme can build bespoke packages of apps for particular clients with particular needs. “The marketplace is integrated into the product. Everyone gets a personalised list of recommendations, which shows the right apps for their clients,” Anderson explained. Downloadable playbooks and courses are also on offer for accountants looking to navigate the technology landscape. With the announcement of UK revenue of £62 million in its yearly results, adding to £286 million in global revenue, Xero looks set to be at the centre of this transformation for some time to come. The post “Businesses are better with an accountant” appeared first on Accountancy Age.

https://www.accountancyage.com/2019/05/24/businesses-are-better-with-an-accountant/

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Outdated processes mean large firms frequently pay staff incorrectly or late

Three-quarters of large companies in the UK process payments incorrectly or late due to the continued use of manual data entry in the payroll process, according to research. The survey by HR and payroll provider MHR, found that the worst offenders accounted for nearly one in ten of all large companies. They confessed to paying employees either late or incorrectly over 12 times in the last year. “Worryingly many are still using outdated manual processes for gathering and inputting data resulting in an awful lot of people suffering from incorrect pay,” said David Crewe head of service operation at MHR. ““This can have a profound impact on people, not only impacting their ability to pay the bills on time but affecting their overall wellbeing, morale and productivity, which over time can force them to leave their jobs,” he added. Over half of companies surveyed admitted to using spreadsheets, which are more susceptible to late payment issues. When asked why their organisations stuck with these methods that are open to errors and miscalculations, more than half of respondents using spreadsheets (62%) and paper (58%) said it was because it had always been done that way. “With payroll professionals already facing many arduous tasks and under pressure to meet compliance obligations to ever-changing employment legislation, it’s inconceivable that organisations of this size can even consider doing their payroll manually rather than with a secure, automated system,” Crewe said. “With Government plans to make tax fully digital already underway, the sooner organisations introduce new digital ways of working the better,” he added. Indeed, a report by QuickBooks found that once firms got to grips with MTD they often experienced “spill-over benefits” as they became more open to embracing technology. Perhaps, with the MTD deadlines now upon us, payroll will soon follow suit. The post Outdated processes mean large firms frequently pay staff incorrectly or late appeared first on Accountancy Age.

https://www.accountancyage.com/2019/05/22/outdated-processes-mean-large-firms-frequently-pay-staff-incorrectly-or-late/

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Goldman Sachs chooses Mazars for audit – but does it really matter?

Goldman Sachs has chosen Parisian accounting firm Mazars to audit its European operation, the first time that the bank has not chosen one of the Big Four accounting firms to conduct its audit. The news, first reported by the Financial Times, is a major coup for Mazars, who are just the 8th biggest auditor in the UK. A spokesperson for Mazars confirmed the appointment but declined to comment further. The Big Four make up around 97% of big companies’ audit, while Mazars has struggled to get a share of the FTSE 350 audit market, which makes Goldman Sachs’ decision a huge step forward for the French auditors. PwC still group auditor However, accounting professor Elaine Harris of Roehampton University questioned the significance of the announcement as Mazars was only named European auditor not group auditor. “Financial services is a complex sector if you haven’t got experience in it, so it’s a responsibility [to be European auditor], but it’s not the top responsibility if you are not doing the group audit. That seems to me the crucial thing,” she said. “To me, that means there’s going to be Mazars and PwC involved in the audit of Goldman Sachs. But ultimately, if you’re the auditor at group level you’re the one that signs off the ultimate annual reports. Goldman Sachs reportedly overlooked all the Big Four firms as they all provide consultancy services to the bank. According to Prof. Harris this brings into question PwC’s role as group auditor for Goldman Sachs. “The CMA have been looking at the split between audit and consultancy which is the other reason they’ve given for not keeping PwC for the European audit. But then what’s the difference between that and the group audit level? If they’re keeping them for the group audit, I’m not quite sure how that argument works.” But despite these reservations, Prof. Harris was still convinced that this was an important moment in the future of audit. “I don’t think it means nothing has changed. It’s significant for the guys at Mazars and its significant for Goldman Sachs.” The post Goldman Sachs chooses Mazars for audit – but does it really matter? appeared first on Accountancy Age.

https://www.accountancyage.com/2019/05/22/goldman-sachs-chooses-mazars-for-audit-but-does-it-really-matter/

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KPMG called in as Jamie Oliver’s restaurants face collapse

Around 1,300 jobs are at risk after celebrity chef, Jamie Oliver’s restaurant chains went into administration today. The restaurant group which includes Jamie’s Italian, has reportedly appointed KPMG as administrators. According to the BBC, Oliver said: “I appreciate how difficult this is for everyone affected.” “I would also like to thank all the customers who have enjoyed and supported us over the last decade, it’s been a real pleasure serving you.” “We launched Jamie’s Italian in 2008 with the intention of positively disrupting mid-market dining in the UK High Street, with great value and much higher quality ingredients, best-in-class animal welfare standards and an amazing team who shared my passion for great food and service. And we did exactly that,” Oliver added. The post KPMG called in as Jamie Oliver’s restaurants face collapse appeared first on Accountancy Age.

https://www.accountancyage.com/2019/05/21/kpmg-called-in-as-jamie-olivers-restaurants-face-collapse/

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Women in Business survey: SMEs call on government to help with parental leave

The cost and resource of maternity and paternity leave is an overwhelming concern for SMEs and the government should be stepping in to help, according to researchers. The Women in Business survey surveyed almost 800 women in SMEs and 96% of board level executives said that parental leave was a significant challenge for their business. Meanwhile, out of 10 business owners called on the government to provide support to help smaller businesses with the financial burden of parental leave. Denise Friend, founder of Friend Partnership, led the study. She said: “Our survey shows that businesses are almost unanimous in believing that government policy for private sector firms isn’t fit for purpose, and that more financial support is essential when it comes to maternity / paternity leave.” According to Friend, the problem was that SMEs simply couldn’t compete with the financial power of large businesses and the public sector. While she understood that large businesses had bigger budgets to play with, Friend said it was not clear how the public sector can afford such healthy packages to employees. “It is totally different for large private sector businesses compared to SMEs – private sector firms can provide what they want; their customers and shareholders are paying. As far as I am aware, the question has not been raised as to why the public sector can offer competing packages – often with 26 weeks fully paid leave or even more – when that money is coming to quite a significant extent from taxes from the very organisations that cannot provide the same benefits for their own employees,” she said. “I urge government to consider supporting the SME sector in a way that provides enhanced parental leave packages by way of tax credits or reduced rates of corporation tax,” Friend added. Flexible working a mandatory requirement The research also identifies the growing need for UK firms to provide flexible working, as it becomes a necessary requirement to attract the highest performing business women. 85% of business owners say they recognise that flexible working conditions are needed if they are to recruit and retain skilled female workers to their organisation. But while 83% of women believed businesses had to offer flexible working to attract high-performing females, nearly three-quarters of business owners said that it was difficult to combine part-time work with a senior role. “Businesses recognise that flexible working is a growing requirement for their employees, especially if they are to attract certain talented women, but flexible working represents a real challenge for most SMEs, and this is a difficult problem,” said Friend. The survey also found that most working mothers believe the workplace and working conditions have improved since their careers began, but on a personal level they face issues with self-confidence, imposter syndrome, balancing career and family, and a pressure to be ‘perfect’. The post Women in Business survey: SMEs call on government to help with parental leave appeared first on Accountancy Age.

https://www.accountancyage.com/2019/05/21/women-in-business-survey-smes-call-on-government-to-help-with-parental-leave/

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EY and Thomson Reuters announce strategic alliance between Onesource and Tax Technology and Transformation services

Ernst & Young LLP (EY) and Thomson Reuters are joining forces in an alliance which brings together Reuters’ Onesource global tax technology with EY’s Tax Technology and Transformation (TTT) services. The move is designed to provide enhanced solutions for multinational organisations to implement tax compliance operations as complying with multi-jurisdictional tax requirements becomes increasingly complex. Kate Barton, EY vice chair – tax, said of the move: “With the rapid rise in platform-based technology in the form of cloud and other secure access platforms, tax departments are beginning to solve problems, source business solutions and interact with tax authorities in a whole different way. Together, EY and Thomson Reuters have the opportunity to provide clients a leading-edge, tech-driven solution to help solve their most complex tax challenges.” EY and Thomson Reuters already have a close relationship after EY acquired Pangea3 from the newsagent earlier this year. This alliance will expand on that existing relationship and provide the ability for EY to serve clients at a deeper level within the ever-changing tax technology space and beyond. Brian Peccarelli, chief operating officer, customer markets, Thomson Reuters, said: “Businesses are responding to technological, social and professional disruption by transforming how they operate and are structured. They now want those they work with to provide transparent, integrated and agile technology with the services that are tailored to meet their needs, not just a one-kind-fits-all offering. “This alliance with EY enables us to provide our clients with the very best technology and advisory services for tax, accounting and legal departments.” The post EY and Thomson Reuters announce strategic alliance between Onesource and Tax Technology and Transformation services appeared first on Accountancy Age.

https://www.accountancyage.com/2019/05/21/ey-and-thomson-reuters-announce-strategic-alliance-between-onesource-and-tax-technology-and-transformation-services/

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Fastest growing businesses more likely to be tech driven

The top 20% highest growth business are more likely to consider themselves as tech-driven, with 71% finding technology to be a key driver for their growth, according to research by Yorkshire Bank. The research, which studied the attitudes and opinions of 2,000 SMEs, found that as a further sign of their forward-thinking mentality, high-growth businesses are more likely to actively review their impact on the environment. The research also hints that technology may be the winning factor for SMEs when trying to secure funding, with 36% of tech-led businesses finding it easy to access funding for growth – only 19% of the rest of the businesses feel the same. “Technology is disrupting many different aspects of our lives, and it is truly revolutionising the way we work. The rise of e-commerce in particular is enabling SMEs to access markets they may never have been able to reach previously. It therefore doesn’t surprise me that high-growth businesses are more likely to be driven by tech,” said Gavin Opperman, group banking business director of CYBG. “We’ve seen a huge adoption in the SME world of many technologies from digital marketing and social media to AI and the IoT. 5G is set to push boundaries and assist a wide range of interconnected devices, which will include everything from company cars to the office environment,” he added. Technology over People The study also found that 46% of small business owners believe technology is now more important to their business than people. However, while Opperman was sure of the benefits of new technology, he was quick to highlight the value of people too. “We shouldn’t forget the importance of people in a digital economy. It is the personal element that helps to build a rapport, creating the long-standing relationships necessary for a trusting and efficient connection between business and customer,” Opperman said. “It is clear that technology can open so many doors and help businesses take that extra step in their growth plans and it is great to see so many UK SMEs embracing this,” he added. Angela McClelland, Co-Founder of The Extraordinary Club said: “Technology of course helps with digital skills, productivity and processes within the workplace, but I don’t think we should lose focus on the importance and power that people have. People and tech need to be complementary.” The post Fastest growing businesses more likely to be tech driven appeared first on Accountancy Age.

https://www.accountancyage.com/2019/05/20/technology-more-important-than-people-for-smes/

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Lack of diversity and social mobility puts young talent off jobs and costs economy £270bn a year

Two-and-a-half million young people are put off from applying to jobs – including in the accounting sector – if they perceive the workforce to be predominantly middle and upper-class, according to research by graduate recruiter platform, Debut. The research also found that workplace discrimination and a lack of social mobility costs the UK economy £270bn a year. In addition, 61% of respondents felt businesses were not doing enough to hire people from diverse backgrounds. “The majority of UK businesses are guilty of ‘professional exclusion’ and as such are missing out on a huge pool of tremendously talented young people from diverse backgrounds,” said James Bennet, CEO of Debut. “This is not only stunting business’ own growth but also severely affecting the wider economy. It is imperative that businesses must do more than just pay lip service to diversity and inclusion and start taking real action to ensure they are in-step with modern social trends and viewpoints,” he added. James Turner, CEO of the Sutton Trust, a foundation dedicated to social mobility, said in the report: “disadvantaged young people are still struggling to get ahead and face worse outcomes than their more advantaged peers. The UK is a particularly class-based society, which hasn’t changed significantly over time.” Implications for accounting The report has worrying implications for the accounting industry, suggesting accounting firms could be losing out due to a lack of diversity. Last September, the Top 50+50 report found that women accounted for just 18% of partners at top UK firms in accounting, and also revealed a £12,985 gender pay gap in the industry. The 50+50 report also found that 54% of firms had no Black, Asian and Minority Ethnic (BAME) partners and 27% had no BAME qualified accountants whatsoever. In the context of Debut’s research, the lack of diversity in accountancy could be having a huge impact on the industry, stifling opportunities to attract the best young talent. Andri Stephanou, student employer brand and attraction senior manager from EY, felt that visibility was key for new employees. “It’s really important for people to be able to see different role models in practice, it supports ambition and positive aspirations, for instance thinking ‘I can do this too, I can achieve success’,” he said. Similarly, Meta Versluys, assistant HR Manager at BKL argued that “a diverse and inclusive culture is more enjoyable, and happy people do better work and provide better client service; which in turn creates happier and more satisfied customers.” Millennials’ trust in business declining Meanwhile, Deloitte’s millennial survey 2019 revealed that UK millennials’ opinions of businesses continues to diminish, with 48% of respondents saying that businesses have a positive impact on society, down from 58% in 2018. “Millennials’ and Gen Z’s trust in business has decreased, in part, because they believe that businesses focus solely on their own agendas rather than considering the consequences for society,” said Dimple Agarwal, global leader for organisation transformation and talent at Deloitte. “It is critical that businesses work harder to retain this talent by understanding their needs. Businesses should bolster their diversity and inclusion initiatives and create a culture that fuels millennials’ and Gen Zs’ creativity, providing them with fulfilling experiences. Priority should be placed on reskilling and training to keep this generation engaged,” Agarwal added. Debut CEO, Bennet, warned that if firms refused to create a more diverse workplace, they would soon feel the cost in a loss of talent. “Today’s graduates don’t just demand equality – they expect it. And as graduates become increasingly more aware – and more vocal – about such issues, the talent pool will dry up for companies that aren’t putting enough of an emphasis on this,” he said. The post Lack of diversity and social mobility puts young talent off jobs and costs economy £270bn a year appeared first on Accountancy Age.

https://www.accountancyage.com/2019/05/20/lack-of-diversity-and-social-mobility-puts-young-talent-off-jobs-and-costs-economy-270bn-a-year/

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Restaurants and takeaways make up a quarter of HMRC’s named and shamed tax defaulters

BDO research has found that restaurants and takeaways make up 26% of those businesses ‘named and shamed’ by HMRC as ‘deliberate tax defaulters‘ since they began publishing the list in 2017. The accounting firm, which analysed HMRC’s own figures for 775 businesses, says this can be explained by the increased temptation for evasion among smaller operators thanks to financial stresses. Restaurants are believed to be more likely than most businesses to under-declare income due to the high volume of cash transactions they process. With margins now under intense pressure in the restaurant industry, the temptation to improve profits by avoiding VAT or payroll taxes has risen. HMRC has also discovered that some restaurants and takeaways use an electronic card payment system which does not leave an audit trail. This could make tax evasion even easier. Examples of UK restaurants ‘named and shamed’ by HMRC recently include: A Chinese takeaway business from Bangor which defaulted on taxes worth over £158,000, between 2012 and 2016, and faces fines of £77,000 An Indian takeaway in Luton which defaulted on taxes worth £413,000 and faces fines of £310,000 A pizza restaurant in Middlesbrough which defaulted on tax of £60,000 and faces fines of £27,000in Middlesbrough defaulted on tax of £60,000 and faces fines of £27,000 Unreported tips One of the areas HMRC has been particularly active in pursuing is tips, which can be difficult to monitor. If a restaurant is misreporting its tips or operating a tips scheme incorrectly, HMRC can pursue lost tax and interest and penalties besides. HMRC has set up specialist taskforces in the past which have investigated specific businesses. These include: Restaurants in the Midlands Fast food outlets in East Anglia Restaurants in Lincolnshire and Tyneside Restaurants in London Partner at BDO Dominic Arnold said: “HMRC’s crackdown on tax evasion and avoidance continues with gusto and remains high on the government’s agenda. “HMRC has a range of taskforces now focused on investigating the restaurant industry. The use of taskforces has proved very effective in the past and businesses need to be aware HMRC is going to continue to throw this kind of concentrated effort at the sector.” The post Restaurants and takeaways make up a quarter of HMRC’s named and shamed tax defaulters appeared first on Accountancy Age.

https://www.accountancyage.com/2019/05/20/restaurants-and-takeaways-make-up-a-quarter-of-hmrcs-named-and-shamed-tax-defaulters/

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Streamline your payroll processes with the Sage 50cloud Payroll Bureau and Sage Online Bureau

Save time, meet deadlines and increase your efficiency with this flexible and secure accountancy software. Hear first-hand from Damon Tunnicliffe, Payroll Manager at Duncan & Toplis, and watch how his company has implemented and benefited from the advanced and intuitive functionality. Bureau Manager Bureau Manager is designed to give you all the information you need in one simple, easy to use, screen. With latest updates, last RTI submissions and up to date pension info, all at your fingertips. With functionality aimed at reducing administration with quick and simple access management to control bureau portfolios throughout your bureau users. We’ve even added a 2nd company reporting to give fast access to data even when you’re right in the middle of a payroll run. Gain more efficiency and improve your payroll processes with this one simple tool. Online Bureau Simple, secure and accessible. With 24/7 access on mobile or Pc, the Sage Online Bureau services help you connect your clients to their employees with simple timesheets data in, payroll reporting uploads and payslips & P60s out.  Automated email reminders and approvals keep you up to date without the effort. Keep your clients and employees connected, 24/7 and on the go. By securely and efficiently storing data in the cloud, clients and employees always have access to their data reducing the need to chase, re-key and deal with queries. Online timesheets The post Streamline your payroll processes with the Sage 50cloud Payroll Bureau and Sage Online Bureau appeared first on Accountancy Age.

https://www.accountancyage.com/2019/05/17/streamline-your-payroll-processes-with-the-sage-50cloud-payroll-bureau-and-sage-online-bureau/

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UK professionals reluctant to use company mental health support

Three quarters of professionals in professional services, banking and finance and commerce and industry who feel they may have a mental health issue are reluctant to make use of support provided by their employers, according to research by recruiters, Morgan McKinley. Morgan McKinley’s Mental Health in the Workplace survey of 1,100 UK employees found that employees were unlikely to seek help despite 98% of respondents believing that mental health problems negatively impact productivity at work. Andrea Webb, people director of Morgan McKinley, called on employers to do more for staff as the survey also found that over a third claimed their employer doesn’t offer any formal mental health, support and a further third were unaware of any support available at work. “There’s a historical stigma that having a mental health issue is considered a ‘weakness’, although fortunately that view is changing. Despite raised awareness in recent years, many employers still aren’t doing enough to provide their workforces with mental health help,” Webb said. Webb also said that better mental health services can cultivate a happier culture which improves retention. “Having programmes in place is not only a useful attraction and retention tool that can help create a happy and positive office culture, but also it ultimately contributes to a more productive workforce as people get the support they need,” she said. “The fundamental foundations are in place at many organisations, but more needs to be done to improve confidence around the discussion of mental health issues at work so that individuals can get the help they require.” The highest proportion of professionals formally diagnosed with a mental health disorder at 23% was professional services, while a further 44% thought “they may have an issue” or were “struggling but not diagnosed”. Almost three quarters of respondents felt that it was good to talk about mental health issues at work, however two thirds of employees from professional services still did not make use of support even though it was available. Morgan McKinley said: “More needs to be done to understand why those employees who acknowledge that they have an issue are not utilising support offered at work.” The post UK professionals reluctant to use company mental health support appeared first on Accountancy Age.

https://www.accountancyage.com/2019/05/17/uk-professionals-reluctant-to-use-company-mental-health-support/

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KPMG UK announce new audit structure – but is it enough?

KPMG UK will change their executive governance structure to separate audit from the rest of the business – but critics have said the changes do not go far enough. The changes will see KPMG create an Audit Executive Committee in attempt to deliver on some of the recommendations made by the CMA and BEIS committee, but they do not represent a full separation of the firm’s audit practice from the rest of the business. Campaigner professor Richard Murphy, from City University, was sceptical about the proposed restructuring and called for KPMG to “entirely separate its audit firm from the rest of its activities.” “I welcome KPMG recognising that there is an issue to address with regard to audit independence. I regret that they are addressing it the wrong way. There is no way that any number of so-called Chinese walls will restore any credibility to the Big Four on this issue,” he said. KPMG UK chairman Bill Michael insisted that the firm was committed to reform. “We’re serious about making changes to restore trust in audit. We understand concerns that the profession’s operating models have become too opaque and we are taking action to tackle these.” The Audit Executive Committee will be headed by Jon Holt, who will become head of audit. The restructuring is intended to enable faster management decisions to be made by those closest to the firm’s clients. “The sole aim and focus of our chair of audit, our new audit executive and our Audit Oversight Committee is to drive audit quality, via strong leadership, good governance, rigorous controls, independent decision-making and separate performance management from the rest of the firm,” he added. However, Prof. Murphy refused to believe that KPMG could be trusted to regulate themselves adequately. “When it is apparent that they cannot comply with existing externally imposed audit regulations, no one will believe that they will respect those that they claim that they will voluntarily apply to themselves to save their own corporate skin.” The post KPMG UK announce new audit structure – but is it enough? appeared first on Accountancy Age.

https://www.accountancyage.com/2019/05/16/kpmg-announces-new-audit-structure/

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Half of businesses not MTD ready, according to report

Despite increased awareness of MTD regulations, 50% of businesses are still not ready for MTD, with 30% still in the planning stage and 20% yet to begin preparations, according to a new report by Tax Systems. The report, A Tax Professionals Survey 2019: Attitudes and Approaches to Making Tax Digital, recommends more support for businesses to get MTD ready before the deadline. “Our results suggest the need for more education from vendors around options for process testing, since 58% of respondents did not know about options to test processes before formally signing up to the service,” the report said. Embracing MTD? Tax Systems’ report also showed that there was an increasingly positive outlook on MTD and technology in general, with nearly half of respondents believing that MTD would lead to better accuracy and fewer errors. “Initially, it would appear that automation is still in its relative infancy when it comes to tax since 80% of survey respondents still use spreadsheets in their compliance processes. However, there is a clear effort to move away from this as professionals begin to recognise the benefits of automation and how they can use it to assist in their everyday work as well as longer projects,” Tax Systems’ report said. Using technology to attract millennials Sixty-two per cent also felt that a wider embrace of technology could help attract younger employees into the workforce. “As Millennial and Gen Z workers begin making up more of our workforce, this tech-savvy generation will want and even demand more automation as they are used to bypassing manual compliance work and other tasks,” the report said. “If you combine the increasing regularity and quality of automation with a growing workforce who want it in their businesses, we can expect to see automation continuing to redefine current jobs and allow tax professionals to undertake more value-added and arguably more interesting work.” “Tax professionals realise businesses need to embrace automation in the next five years and they are prepared to navigate the challenges it brings” However, there was still some way to go to convince everyone, with 65% believing that automation would not move tax professionals away from their spreadsheets. “Automation is very much the future. Spreadsheets are still massively in use, but this is unsurprising. MTD and the wider change that automation brings is colossal and businesses could never have been expected to make the switch overnight. Tax professionals realise businesses need to embrace automation in the next five years and they are prepared to navigate the challenges it brings,” the report said. The post Half of businesses not MTD ready, according to report appeared first on Accountancy Age.

https://www.accountancyage.com/2019/05/15/report-by-tax-systems-has-found-that-nearly-50-of-businesses-are-not-mtd-ready/

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Self-learning technology could perform 90% of data entry tasks – but will it take your job?

Self-learning technology could create a scenario where bookkeepers only have to do one in 10 invoices, according to Markus Mantere, sales director of robotics company Arkimera. Arkimera have developed a self-learning AI product which “learns” how to file accounts exactly as the user would have done. It could kick-start a revolution in how accountants work. “This technology opens up possibilities for bookkeeping firms to do their job more efficiently and cheaper than the competition today,” Mantere said. However, he warned that expectations of accountants would inevitably change. “I believe you need to broaden your offering because manual data entry will be less and less relevant,” he said. ICAEW’s head of IT Faculty, Richard Anning agreed. He said that the original premise behind MTD was “to make it easier for your plumbers and your hairdresser” and to make manual data entry less problematic. “People could just take a picture of the invoices on their mobile and shoot that through to their accounting software which gets updated automatically, then off it goes to their accounting system and off to HMRC and the tax is sorted. That’s the nirvana and its starting to happen,” Anning added. But will this lead to mass job losses for accountants? “When farmers were domesticating animals, it wasn’t like the horse or the bull was taking the farmers job, it was a new tool in the toolbelt and the farmers that started using animals were more prosperous,” Mantere said.  Speaking at Accountex last week, Ed Molyneux CEO of FreeAgent was similarly optimistic about the impact of disruptive technology. “The majority of people [accountants] say their least enjoyable thing is chasing up clients and messing around with numbers. Well, that’s great news as we are talking about those things being automated away,” Molyneux said. “Today we are stating to see things like bookkeeping become much more automated. That’s what we all benefit from every day that we work with clients, the ability to use tools to help do our job better.”  It appears this attitude is widespread among accountants. Molyneux said that a survey by FreeAgent found that 75% of accountants thought some of their job would be automated in the next five years, but 82% still felt that a robot could not do their job. Opportunity not a threat Instead of mass job losses, Molyneux believed that the role of an accountant will instead move to a more advisory role. “We are going to see more automation and more ability to be able to assume that these things are just taken care of in software. And then move from this first aid kit role, which is just keeping these clients alive, to being able to generate new ideas to genuinely help clients grow their business.” Similarly, Anning believes that over time “the role of the accountant will change from one being a tax preparer to one being a tax assurer, to making sure that what HMRC is charging you is correct.” Like Molyneux, Anning was upbeat about the changes that technology would bring to the industry and felt that optimism was widespread: “Everyone I talk to sees it as an opportunity. Because accountants, intelligent people, don’t necessarily want to spent loads of timing doing detailed compliance work. It’s much more satisfactory to do the higher level stuff: business coaching, business advisory, insight from the data.” “It’s a much more satisfactory, higher value service, and I think most of our members that I talk to are much keener to do higher value work,” Anning said.   However, Mantere was unconvinced that the idea of accountants moving to an advisory role was realistic for the whole profession. “I know that this advisory thing is really high stuff, I believe that is one way towards the future. But at the same time, it would be naïve to say, “how many accountants and bookkeepers do we have today? All of them are going to become advisers instead,” he said. “Why would there all of a sudden, be that big of a need amongst all of the customers? That is not a customer perspective, that is the perspective from the industry.” The post Self-learning technology could perform 90% of data entry tasks – but will it take your job? appeared first on Accountancy Age.

https://www.accountancyage.com/2019/05/14/self-learning-technology-could-perform-90-of-data-entry-tasks-but-will-it-take-your-job/

[accountancyandtaxupdate-blog]

A partnership embracing the technology revolution for SMEs

There are over 5.4 million micro SMEs with fewer than nine employees operating in the UK, according to the House of Commons library. Accounting for over 33% of jobs across the country, these businesses are a vital cog in the UK’s economy. Small businesses bring wealth and employment to the UK – and above all, competition. There are an estimated 210,00 of them operating in the UK with fewer than 50 employees, making the need to manage cashflow and outgoings crucial. At the same time, the success of these SMEs is being held back by a lack of automation as multi-tasking staff struggle with manual processes and increasingly complex operational burdens. The good news is that technology vendors are beginning to offer affordable solutions to automate key business functions for the SMEs, freeing up staff to add value to the business, drive growth and build relationships with their customers. In this video we explore one partnership looking working towards doing just that. The SME technology revolution from bobsguide on Vimeo. The post A partnership embracing the technology revolution for SMEs appeared first on Accountancy Age.

https://www.accountancyage.com/2019/05/13/a-partnership-embracing-the-technology-revolution-for-smes/

[accountancyandtaxupdate-blog]

Accountants must embrace blockchain to thrive

Revolutionary technology like blockchain will drastically alter the role of accountants, meaning they will become “the digital detectives of tomorrow”, according to industry speaker and author Ian Khan. “This is the next frontier,” he said, speaking at Accountex last week, in London. “Technology is the next frontier. If you don’t know about technology, don’t know what it does, then how will you be able to succeed in this era that’s powered by technology?” “There’s still space in this era for accountants. But accountants have to be more tech-savvy,” he added. Emerging technologies was a major theme at this year’s Accountex. Speakers such as FreeAgent CEO Ed Molyneux warned that many of the traditional roles of accountants were starting to become automated and that the accountant’s role could become increasingly advisory. “Traditional sources of information can be inaccurate. Today we work with Excel sheets, printed documents and receipts. [Accountants] handle so much paperwork, there’s got to be some inaccuracies. Excel sheets are great, but I don’t think they are the best or the most secure medium of exchanging information, Excel sheets are not secure at all,” he added. Khan added that automated technology innovations like blockchain and artificial intelligence will render manual elements of accountancy, like booking invoices or processing payments, obsolete. His comments echo research carried out by Atherton Research, which estimates that accounting tasks will be fully automated by 2020. “I really believe that blockchain will eliminate the need for accounting firms to do an annual audit. In plain words, the audit side of things is slipping away from accounting firms because of blockchain. Now we’re not there yet, but in the next 4-7 years this pace might change,” Khan said. A 2017 blockchain report states that “while the audit process may become more continuous, auditors will still have to apply professional judgment when analysing accounting estimates and other judgments made by management in the preparation of financial statements.” Khan was adamant that new technology like blockchain presents an opportunity to grow and should not be considered a threat. “Accounting firm professionals need to step in to technology. If you really want to succeed as a firm or a professional, you need to start learning,” he said. “I would say in the next five to 10 years the role of accountants will change from being financial accountants to technology accountants. Rather than the pen and the spreadsheet, you will be using blockchain and smart contracts.” The post Accountants must embrace blockchain to thrive appeared first on Accountancy Age.

https://www.accountancyage.com/2019/05/07/accountants-must-embrace-blockchain-to-thrive/