When it comes to political and legislative changes, UK businesses certainly have their hands full. The likes of Brexit, General Data Protection Regulations (GDPR) and Making Tax Digital (MTD) will all have serious implications for companies across the country.
Take GDPR for example. Non-compliance could be the difference between success and failure, and fines could be as high as €20 million or four per cent of annual turnover come 25th May 2018. While penalties for MTD non-compliance haven’t been announced yet, delays mean this is likely on the back-burner for many accountants and small businesses.
Digital record-keeping is quickly becoming a necessity – not only legally but to be competitive as well. So, it’s a safe assumption the accountants many businesses look towards to support them on their compliance journey are taking these legislative changes seriously, right?
Managing the red tape
There seems to be a worrying gap between confidence levels and the work currently taking place. With less than four months until GDPR compliance is mandatory, research shows just six per cent of UK accountants believe their organisation will not be ready by May 2018.
Despite this, only 41 per cent have reviewed their personal data protection processes, while even fewer (36 per cent) have implemented a GDPR plan. Perhaps the most frightening figure is only 39 per cent of accountants have started talking to their clients about what GDPR will mean for them.
Although Brexit isn’t legislation businesses need to comply with as such, preparation for the vast changes it will bring is just as vital as GDPR. Any business trading with countries in the EU will need to look at how they will be impacted over the coming years as profit margins will undoubtedly be hit.
Similarly, international organisations with offices in the UK and EU countries may need to consider the viability of relocating elements of the business, depending on the results of the impending negotiations. That’s before the inevitable legislative changes which will hit businesses once the UK is no longer under the rule of the EU.
This is a tumultuous time when businesses will expect their accountant to support them through, and rightly so. As it stands only 11 per cent of accountants currently offer Brexit planning as a service and just 13 per cent believe they will do so in three years’ time.
This highlights a wider mindset within the industry which needs to change. For many this results in red tape being tackled at the last minute. Businesses must demand their accountants begin working on compliance at the earliest possible date to ease the burden of red tape.
The constant barrage of red tape which hits British companies can be challenging and increases stress levels vastly. However, this doesn’t need to be the case.
Business leaders must contact their accountants and request consultancy on exactly how to overcome the obstacles ahead. By working with accountants to signpost the weaknesses which need to be tackled to ensure compliance before creating a strategic plan, compliance will become increasingly manageable. After all, a problem shared is a problem halved.
Embracing technology to ease red tape complexity
One way accountants can relieve the burden of red tape is by introducing businesses to the vast array of technology available.
Once this takes place, businesses can automate large portions of the compliance work which would traditionally have taken them months. For example, for the upcoming MTD legislation, requiring small businesses to adopt digital record keeping and quarterly tax reporting, will all but ensure compliance without a vast increase in workloads. In fact, after the initial move to digital, workloads will fall due to the automation offered. It will truly transform the way businesses work.
By taking advantage of the expertise of the accountancy industry, businesses will not only simplify compliance but free their time to focus on what’s most important – business growth.
Sion Lewis is CEO at IRIS Accountancy Solutions