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Brexit and Accounting 2019 July

Many multinational companies, whose headquarters are situated outside the EU (European Union), have chosen the UK as part of their operation 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 operations in order for them to have easy access to the single market. The importance of the European single market is to allow free trading of goods, capital, services & 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, computerised accounting software is common nowadays to monitor the company’s financial situation. 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.

Brexit will have a positive impact on the UK job market, especially in the accountancy sector. This is due to there being more job opportunities available for UK citizens, causing the unemployment rate to decline. HMRC will support current businesses into the transition by sending advice letters to companies, who trade with the EU, recommending them to register for their EORI numbers to track their goods.

Brexit and Accounting 2019 July

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 implication 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 upon. 25% are in disbelief as it would cost thousands of jobs leading to a rapid rise in unemployment.

The government has introduced Making Tax Digital (MTD) for businesses with a VAT threshold of above £85,000, using accounting software approved by the HMRC. Companies will benefit from this as they can link their business bank account and sales to track all the businesses 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 was introduced to what is supposed to happen next year.

Brexit and Accounting 2019

HMRC have confirmed that due to Brexit, they have informed all businesses about their changes so that it can be acted on immediately regardless of the Brexit deal goes through or not. The government have mentioned that Brexit will not be affected by MTDs anymore and has been confirmed. It was initially supposed to be announced in 2018, but due to complications of the EU exit, it had been delayed. The idea is now being implemented in 2019, and by 2020, every business must comply with MTD.

Nowadays, companies (regardless of size) are not interested in hiring employees with knowledge of using manual accounting as it is a more prolonged procedure to process reports. As well as that, Manual Accounting has been declining since accounting software’s like Sage Xero, QuickBooks being 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. Organisations feel they can benefit from understanding the trends of accounting solutions so to:

  • Minimise costs
  • Improve time management
  • Be better prepared for future changes in accounting
  • Simplify the collaboration with clients and enhances the quality of service and increasing client satisfaction.

Therefore, training will be required on electronic-based accounting to attract high profile companies recruiting you. Future Connect Training offers computerised accounting training where students can gain skills and an understanding of the various types of software’s available to entice major firms into employing them. The software’s we cover have their 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 a real-world work experience to help get ready to work confidently. The software training we offer is approved by the HMRC when linking businesses bank account, track all their transactions and submitting the VAT returns directly to and from HMRC systems. In each of this software, 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.

Checkout our Industry-specific training programs 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 www.fctraining.org for any other information.