Starting from 2020, the effects of Brexit are both positive and negative on accountancy. Be prepared to fill the vacant job positions by joining our course. "
Brexit was the extraction of the United Kingdom from the European Union. The effects of Brexit are prominent in the UK accounting job market. Because political and social stability matter a lot for the job market, In this article, we look at the effects of Brexit and how it will affect the UK job market from an accounting point of view.
Future Connect has to make sure its current AAT and accounting provisions are able to address the changes happening in the accounting industry due to the effects of Brexit.
What Is Brexit About?
Many multinational companies with headquarters outside of the EU (European Union) have chosen the UK as part of their plans to access the EU's Single Market. However, after Brexit, the UK will lose access to the Single Market. Other European countries could consider taking this opportunity of being the base of accounting operations for themselves to have easy access to the single market. The importance of the European single market is to allow free trade of goods, capital, services, and labour within the EU. Currently, there are 28 countries in the EU, so any country within the EU would be willing to take this opportunity.
When businesses move away from the UK, it causes accountants to lose their clients, which will affect the revenue of their firms. However, while accountants may not be able to see their clients in person, due to modern-day technology, people can use Skype and email to communicate with their clients abroad. As well as that, it is common for companies to use computerised accounting software to keep track of their finances.
Effects of Brexit
Positive Effects of Brexit on Accounting
This will benefit users instead of using manual accounting as it is:
- Cost-effective
- A simple way of producing financial output for monthly reports.
- Online, so data will be more accessible for different people to access accounting data outside of the office, securely.
Negative Effects of Brexit on Accounting
Mostly, accountants will sense the effects of Brexit through their clients. A recent article covers some examples:
- Businesses may displace
- Supply chains could be disturbed by duties checks
- Possible skill deficiencies through deviations to free movement
The main threat is a hit to the clients’ sense of solidity. Accountants can imagine that their clients will ask for more advice and support with planning, predicting, and managing working capital.
The Effects of Brexit On the UK Job Market
It is expected to have positive effects of Brexit on the UK job market, especially in the accountancy sector. This is due to there being more job opportunities available for UK citizens, which caused the unemployment rate to decline. HMRC will support current businesses in the transition by sending advice letters to companies, who trade with the EU, recommending they register for their EORI numbers to track their goods.
This pie chart displays MPs' views on whether Brexit will benefit the accounting sector or not. 47% of MPs believe that accountants can advise clients on the implications of leaving the EU. 28% are still uncertain about tax, compliance, and the overall impact on businesses, but the numbers will differ for the uncertain MPs once the decision has been agreed on. 25% are in disbelief as it would cost thousands of jobs, leading to a rapid rise in unemployment.
Making Tax Digital-MTD
The government has introduced Making Tax Digital (MTD) for businesses with a VAT threshold of above £85,000 using accounting software approved by HMRC. Companies will benefit from this as they can link their business bank account and sales to track all the business transactions in real time instead of waiting until the end of the financial year. The new concept will help businesses to:
- Assess their financial situation.
- Improve their cash flow.
- Help them to make better decisions for them to achieve higher sales revenue.
- Report accurate financial information to HMRC on a quarterly basis to prevent them from receiving fines or facing prosecution.
The timeline below shows how MTDs were introduced and what is supposed to happen next year.
HMRC has confirmed that, because of the effects of Brexit, they have told all businesses about the changes that need to be made so that they can be made right away, whether or not the Brexit deal is approved. The government has said that MTDs will no longer have an effect on Brexit, and this has been confirmed. It was supposed to be announced in 2018, but because of problems with leaving the EU, it has been put off. The idea is now being implemented in 2019, and by 2020, every business must comply with MTD.
Accounting Automation
Companies of any size don't want to hire people who know how to do manual accounting anymore, because it takes longer to process reports that way. As well as that, manual accounting has been declining since accounting software like Sage Xero and QuickBooks were available In the UK, 58% of large companies use computerised accounting, and 100% of the businesses using cloud-based accounting saw 15% over-year revenue growth.
Benefits Of Accounting Automation
Organisations feel they can benefit from understanding the trends of accounting solutions so as to:
- Minimize costs
- Improve time management
- Be better prepared for future changes in accounting
- Simplify the collaboration with clients and enhances the quality of service and increase client satisfaction.
Future Connect Training
Therefore, training will be required on electronic-based accounting to attract high-profile companies to recruit you. Future Connect Training offers computerised accounting training where students can gain skills and an understanding of the various types of software available to entice major firms into employing them. The software we cover has its own strengths and functions, which will benefit business owners or accounting professionals as it is relevant to their causes.
The programmes we offer include practical hands-on training given by certified accountants that will provide real-world work experience to help them get ready to work confidently. The software training we offer is approved by the HMRC when linking businesses' bank accounts, tracking all their transactions, and submitting the VAT returns directly to and from HMRC systems. In each of these programmes, we focus on the functions used in modern-day organisations to ensure that you will be prepared and gain enough experience to specialise in them.
There may be a possibility of Brexit happening and new laws being introduced; however; it is unconfirmed yet until the final decision has been made.
Check out our Industry-specific training programmes here. We have centres based in London and Birmingham. Contact us at 02037908674 or 01212959988 to book a free consultation session. You can also email us any questions at support@fctraining.org or visit our website at www.fctraining.org for any other information.