Effects Of Brexit On Accounting | Future Connect Training

Brexit and Accounting 2019 July

"Brexit will have both positive and negative effect on the accountancy starting from 2020. Be prepared and fill the vacant job positions by joining our course."

Brexit was the extraction of the United Kingdom from the European Union. It may impact UK accounting job marketing. Because political and social stability matter a lot for job market. In this article we analyze Brexit and accounting impact on UK job market.

What Is Brexit About?

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 accounting operations 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, automated computerized accounting software is common nowadays to monitor the company’s financial situation.

Brexit And 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.

Brexit: The Impact Of Accounting

Mainly, 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 see for more advice, support with planning, predicting, and managing working capital.

Brexit Impact On UK Job Market

Brexit will have a positive effect 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 agreeing 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 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 has 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 was now being implemented in 2019, and by 2020, every business must comply with MTD.

Accounting Automation

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 computerized accounting, and 100% of the businesses using cloud-based accounting saw 15% over year revenue growth.

Benefits Of Accounting Automation

Organizations feel they can benefit from understanding the trends of accounting solutions so 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 increasing client satisfaction.

Future Connect Training

Therefore, training will be required on electronic-based accounting to attract high profile companies recruiting you. Future Connect Training offers computerized 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 programs 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 these software, we focus on the functions used in modern-day organizations to ensure that you will be prepared and gain enough experience to specialize 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.