new micro entities reporting

new micro entities reporting

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have been reading up on the proposed ''micro entities'' simplified reporting. worries me a bit especially that my client base fits the definition - up to 500k EUR and less than 10 employees. If they will require a much simpler set of figures, then where's the need for an accountant? they could do it them selves or the bookkeepers can handle it

  http://www.icaew.com/~/media/Files/icaew-faqs-micro-entities.ashx

since most of my work is compliance based I see the fees dropping very sharply and clients going away to do it themselves.

What do you think? career change moment?

really worried by this and seeking your thoughts.

Replies (8)

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By Steve McQueen
13th Nov 2011 21:36

Its evolution rather than revolution

The doom of the sole prac has been predicted for a long time, and yet I do not believe that they will ever disappear. The nature of the work you do, the offering you have, the fees you charge and the adapations to the market you present will have to evolve and change, but I would be extremely surprised if opportunities do not exist for the sole prac 50 years from now and they did 50 years ago. After all, opportunities still exist in food retail for the one man band (eg; the deli and the specialist shops) despite Tesco.

Steve

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David Winch
By David Winch
13th Nov 2011 19:43

I remember a long time ago a partner of mine being very worried that the increasing availability of computers to small businesses would spell the end of the road for small practitioners.

It hasn't happened!

David

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By Tonykelly
14th Nov 2011 13:57

worried?! you should be pleased

This is good news as any removal of red tape is to be welcomed.

If there are savings to be made by clients, this is good news also.

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Giraffe
By Luke
14th Nov 2011 14:05

Neutru - I can see where you're coming from

All of my clients fit the criteria too and to be honest whilst I'd like to say hurrah, all for the greater good, I'd be rather stuffed if it goes ahead and clients all decide to DIY.  I'll be watching closely.

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By SE_Confused
14th Nov 2011 14:23

reading stuff like they want all submissions in 3 months after the deadline plus all that radical simplification makes me think do they want to get rid of tax reliefs if reporting is to be simplified that much?

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By pjclar02
14th Nov 2011 14:44

I think the big unknown factor in this is how the clients will react to the relaxation. 

Some of them will no doubt decide to prepare the filings themselves, and it is almost inevitable that this will result in a loss of fees for small practitioners. 

There is always the risk, however, that what these clients are saving in accountancy fees, they are losing in potential tax savings that would only come to light when their accountant prepares their year end figures - and this is certainly the angle I will be working on existing clients.

On the other hand, there will be clients who still don't want the hassle of preparing their own filings (or don't have capability) and would prefer to outsource this so they can concentrate on the things they do best.

At the same time, the simplification will lead to slightly reduced timeframes for accountants to carry out the work involved in preparing the filings - freeing up time for business development.  I'm sure there will be a trickle down effect with some of these businesses that are maybe paying £2-£3k per year to the large or medium practices looking to reduce the fees they are paying.  Due to the overheads of the bigger firms they may not be able to react with a fee reduction and this may be an opportunity to pick up work from the bigger players.

I think Steve McQueen summed it up quite nicely - you need to be willing to adapt the way your practice operates to accommodate the changes, looking at staffing needs, fee levels for existing clients, marketing efforts (communication to existing clients as well as possible new business).

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By Robjoy
17th Nov 2011 20:22

Speaking as a micro entity

I've lamented the impression I've been getting over the last few years that it was becoming increasingly difficult to do without an accountant.

I've been bookkeeping for 30 years, including stints as Financial Controller and Financial Director, and usually having sole responsibility for accounts. My finished TB's rarely needed any adjustment before getting plugged into Iris (or whatever), so I should surely be able to handle the whole thing for our small, very straightforward limited company, don't you think? But every year there are little changes - the wording required on the accounts has to be just so, new wrinkles in capital allowances, now we have iXBRL.

I'd love to be able to hand the whole kaboodle over to a local I-like-small-clients accounting practice, especially so they could tell me any ways of paying less tax, but money has been so tight we've had to give up dentists, opticians, holidays etc., and I have had to struggle on. It seems to me wrong, in principle, that someone like me should feel pressurised into paying an accountant. So anything which might make me feel more comfortable with DIY end of year filing would be welcome.

No offence to you guys, but I'd also point out that it annoys me when the junior in a practice 'doing' my books knows less than I do, and the partner hardly even pretends to given them more than a cursory glance before a meeting.

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By Cruncher42
20th Nov 2011 22:39

As someone specialising in sole traders

I specialise in sole traders and I suspect that even if it was simplified, clients would still want an accountant for two reasons.

Firstly, the present system is not prohibitively complex that many clients couldn't DIY already.  They don't because quite rightly they realise their time is better spent elsewhere.

Secondly I think they want someone who they can to talk to about their business.

South London Accountant

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