Future Focus: How will things have changed by the end of the (taxing) twenties?

Jan 28, 2020 | Business Strategy

Depending upon how pedantic you are, we are at the start of a new decade (the taxing twenties?). In any event, when you consider your plans for the immediate future, it’s worth considering how different things will be by 2030.

Given the pace of change all around us, we can reasonably expect that, over the next ten years, there will have been a revolution in the tax compliance world.

Many recent developments have set the scene and the pace of change is getting faster. Imagine how different your practice will need to be in ten years time when:

  • HMRC will be drawing more data for tax returns directly from employers’ payroll filings, from banks and investment houses as well as from quarterly MTD filings.
  • Contractors, traders and small business owners will, by then, be totally familiar and comfortable with cloud bookkeeping software, mobile receipt capture and direct banking feeds.
  • Business accounts and tax data will be generated far faster from accounting systems – with much reduced need for interventions from qualified advisers.
  • Clients will be using more reliable, intuitive and integrated software packages that relies on AI (or similar) to enable novice users to set things up with minimal input and support.
  • New business start-ups will be able to register quickly and easily online, due to AI supported interfaces. Thus taxpayers will need far less help and support from advisers than they have done to date.
  • Most people starting new businesses will choose their software first and then, to the extent that they want any help, they will choose someone from a list on the software’s website. This is inevitable as such people, new to the business world will be so used to one click buying and next day delivery. ‘Right now’ has already become the new normal when buying things.
  • The owners of growing businesses will be inundated with offerings from a range of experienced business advisers and mentors to enhance their business strategy and support their growth. They will all have access to much the same software support as qualified advisers.
  • Business owners, CFOs, FDs and owners of accounting firms will be making more use of outsourced services that only require payment by results rather than for their time.
  • You will have easy access to expert tax systems that bring complex tax advice within easy reach.
  • Tax staff will be arranging and funding more of their own training to ensure that they are attractive to employers who will have less need for raw trainees than has been the case to date.
  • To the extent that you still have employees they will demand more flexible working arrangements and work remotely as often as they are in the ‘office’.
  • Much of your recurring communications with clients will be AI led, requiring little in the way of human input.
  • You will no longer be focused on providing traditional tax compliance services. This is because there will be so many unqualified tax support agents providing low cost services that appeal to more straightforward clients who will feel they cannot benefit sufficiently from paying higher fees to qualified advisers.
  • Your competitors will be charging more competitive fees as they will be using more cost effective technology for tax compliance and advisory services. This tech will enable advisers to minimise overheads by limiting the number of staff they employ directly and thus reducing their employment costs, including NICs as well as space costs and the unproductive cost of paying for down time, study time, sickness and holidays.

Remember, I’m not suggesting all of this will happen in the next year or so. It might take five years. It might take ten. But much, if not all, of this will become commonplace during the next decade. The signs and evidence are all there. And, over time, the new technology will enable you to do things faster, more efficiently, more productively and, potentially, at lower cost too.

Go back through that list and consider, once each of these developments has become the norm, how many of your current clients will still require the services you currently provide? And what will you need to do differently to win over prospective new clients? Many will require less help and support from an accountant than is currently the case. What conversations will you need to start having to evidence that you can deliver real value to prospective clients who don’t require the same level of start-up and compliance support?

The good news is the fact that, contrary to some naive predictions, there is no real prospect that Artificial Intelligence (AI) will fully replace human advisers in the near future. This is because there are some things that AI will not be able to do – at least not within the next ten years or so:

  • Collaborative problem solving
  • Constructive questioning
  • Evidence emotional intelligence
  • Exercise critical thinking skills
  • Exercise judgement
  • Provide handholding, care and support

The more able you are to evidence such skills and services the more likely you are to win new clients and retain them.  But this may all require a very different approach to that which you have adopted in the past. Do you want to get ahead of the pack or will you be happy to play catch up and hope?

If you want to get ahead I would encourage you to consider which skills you need to develop to future proof your practice and your career. Then resolve to find out more and ensure that at least part of your CPD this year is devoted to progressing this aim.

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