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Accountants are having to deal with major disruption as the government presses ahead with its plans to digitise the entire process of filing tax records, according to a new report.
The Enriching productivity leads to profitable client relationships for accountancy firms report by IT firm Prism Solutions argues that accountancy professionals are struggling to keep up with the changes brought about by HM Revenue and Customs’ (HMRC’s) Making Tax Digital (MTD) scheme to eventually eradicate paper from filing processes.
MTD is being introduced in stages, and registered businesses earning more than £85,000 per year are required to file their tax records for the VAT period that started on or after 1 April 2019 through a digital interface. A further roll-out will take place in 2021.
With 1.2 million businesses expected to take part in the VAT trial, the report argues that HMRC is “pressing the starting gun” on sweeping changes in the industry. While most accountancy firms have been adopting new technology to stay compliant, the research argued that challenges faced by the industry are of a different nature.
The whitepaper pointed out that, while adopting new technology, firms must continue to pay attention to the needs and wellbeing of their employees, as well as their clients. It is, the report states, “a case of reimmersing oneself in the needs and expectations of those who require digital accountancy”.
“The accountancy profession is on the verge of an evolutionary change. Its survival is at stake,” the report noted.
While digital accountancy may be convenient, firms must be able to provide services which cater to all clients across all channels, the report noted. “Just because you are using digital tools to assist clients and present information, you still need to create an environment that feels like a face-to-face customer service environment, but by using digital tools,” it added.
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Digital bookkeeping also introduces some other dilemmas for sector professionals, according to the report, which include a new “always-on” working pattern that was not very common in the segment, with customers expecting instant service and issue resolution.
“Being able to deliver a superior client experience in a highly productive manner is a key business driver for accountancy firms in attracting new clients, and the talent to service them,” the report concluded.