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Why The Common Reporting Standard Is Important

12th Jun 2018
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Accountants have a lot to keep in mind these days, but recent developments and regulatory changes have sucked so much of the oxygen out of the room that many accounting professionals are forgetting just how important the common reporting standard is. Accountants should be considering the common reporting standard much more often than they currently are, and could pay a serious price if they continue to ignore it amidst all the other headline-grabbing changes occurring in their industry.

Here’s the basic information about the common reporting standard you need to know, and why it’s so vital to accountants who intend to remain relevant for years to come.

It’s not all about the international world

Many accountants sate themselves when ignoring certain rules by noting that they’re often global in scope, and that they should only really be concerned with UK laws if they’re to really service their clients well. As a matter of fact, however, the common reporting standard is about much more than just the international world, and has a daily impact on how Brits do their business at home. You may actually be legally required to inform some of your clients about this standard, so don’t brush this under the rug thinking it doesn’t concern you.

As long as OECD countries continue to work together, we can expect such regulations as the common reporting standard to endure. That’s why UK accountants should brief themselves on whether they’re required or not to notify clients about the common reporting standard if they want to avoid a hit to their prestige and potential legal troubles. Establishing a team member to guarantee that all clients are kept up to date is a good idea for your firm if you’ve not already jumped the gun on this issue.

One of the reasons the common reporting standard is so important is that it drives home an ancient argument that tax professionals need to make sure their clients understand from day one; if you’re involved in financial wrongdoing, it’s important to come forward and be clear about it rather than attempting to hide it by using a service to buy YouTube subscribers and selling your message online. When changes were ushered in during 2016 that made the common reporting standard so essential, it was made clear that accountants with overseas tax affairs should come clean to HMRC, as the consequences of not doing so can be even worse in today’s international economy.

Historical tax irregularities could see your clients facing steep fines, for instance, and a breakdown of the common reporting standard goes into even further detail describing how much firms can suffer if they don’t take this standard seriously from the get-go.

Don’t let it become a mundane process

The fact that the common reporting standard necessitates annual reports may lead your firm to generally adopt a mundane process that you follow every time you need to ensure you’re being compliant with regulations. It’s imperative that you don’t allow it to become a mundane process, however, as doing so can let you grow lax and eventually see you fall out of compliance with strict international regulations and national law.

Making sure you’re paying attention to the common reporting standard year-round is the easiest way to guarantee it doesn’t sneak up on you, or become a boring task only visited once a year. Having dedicated team members making sure you’re staying up to date on keeping clients informed and remaining compliant yourself, and you’ll avoid simple mistakes that can add up to cost you big in the long run.

At the end of the day, accountants and firms who like to champion greater transparency in their industry are likely to welcome the common reporting standard with open arms. After all, few regulations have helped a culture of transparency develop so much as the common reporting standard has, and as others have already made clear, the common reporting standard will likely help us avoid countless tax headaches and transparency crises in the future. Don’t allow your firm to get left behind by failing to brief its clients on the common reporting standard ahead of time, and be sure to come forward with l undisclosed foreign tax affairs if you want to avoid steep penalties.

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