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A mini-boom for accountants might be coming soon – and it’s not the insolvency practitioners

Richard Murphy adds a contrarian voice to the despair wrought by COVID-19 and encourages accountants to get ready for a post-virus wave of new businesses.

23rd Apr 2020
Founder and blogger Tax Research UK
Columnist
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Businessman holding up profits during tough economic times.
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Like many, I am still reeling in shock from the coronavirus crisis. Partly that’s because I am quite sure I have had it, although I have not been tested to prove the fact. But I can advise that it’s not a fun experience as a consequence, although I am fully recovered now.

In addition, that’s because like many others I am facing a loss of business activity: latest survey data shows that most of us are. I suspect I have the resilience to survive this. I am only too well aware that many small businesses will not.

And, like so many, I am wondering where all this will end. That issue is generically too big to consider here. So let me offer some thoughts in the context of accountancy, and most especially the accountancy practice.

I am only too aware of tales of falling profits, closed M&A practices, an absence of audit work and furloughed staff at present from right across the profession. Even compliance work may be reduced as clients fail, payroll sizes fall and the number of VAT returns decline. All my tax investigations are on hold right now as well.

A post-virus boom

The result is significant stress. But, I want to offer a contrarian voice to all those who see only despair in this.

It’s true that things are bleak and money is going to be tight, but precisely because of that there is going to be a mass of small business startups this year. And by a mass, I mean that there might be literally millions of micro or very small business startups this year as people are forced out of work, or having seen their old enterprises collapse, face the reality that finding employment is going to be tough and strike out afresh on their own.

After all, what else are people desperate to earn a living and who face mass unemployment going to do, not least when there will also be a pent up demand to spend this summer?

I do not wish to be too prescriptive, because no one knows the future, but it’s not too hard to imagine what some of these new businesses might be.

First, there will be a rash of new restaurants to replace those that have gone bust, driven by landlords seeking to secure new tenants at almost any rent. Pop-ups and street food moving indoors will fuel this.

Expect a host of new coffee shops too; people are desperate to go out and talk.

What else? Vast numbers of small service and hobby focused businesses will start. After a crisis people want to make changes without spending a fortune: incremental products that make people feel better about the homes they will have been cooped up in for too long, and whose faults they will have now seen, will be in big demand. And small businesses created by people who have never used their hobby based skills commercially before will be ideally placed to service this need.

There will be ample others: expect new technology businesses based on 3D printing to flourish, for example. I know those that are already.

And what this all means is that very large numbers of people who have never considered self employment before might be doing so before this summer is out.

Accountants need to be ready

It may not feel like the right time for accountants to be reviewing their new business product offerings and services, but I suggest that it is. Those accountants who are ready to offer a package of now business support services to those heading into this great unknown for many who will be facing it will reap the rewards from doing so.

What to do then? Get the marketing thought through now, I suggest.

  • Make sure a slick web site is ready.
  • Have the free online advice that lures people in but leaves questions still needing answers all ready to go.
  • Make sure that the training for signing up significant numbers of new clients has been done. Get the pricing menu done, and test it.
  • Have the app ready.
  • But most of all, get people who can deliver this kind of client service in the right mindset very soon.

It’s easy to be despondent right now. For some that mood might never go. But overall people are remarkably resilient. They want to survive. They will survive. And they will fall back on their own resources to do so. New businesses will result. Accountants need to be ready for that, very soon.

There is then no time to sit around now. If you do you will be too late. A mini-boom for some accountants might be coming very soon.

Replies (10)

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Helen Froggett Thomson
By Helen Froggett-Thomson
24th Apr 2020 09:21

Couldn't agree more. We have been fine tuning our offering for a while now as we specialise in start ups as it is. And we're launching a new online only service for simple accounts provision to complement our 'hand holding' service. Thanks for this feature Richard.

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By meadowsaw227
24th Apr 2020 09:29

Have only ever taken on one pub/restaurant/coffee shop , not a good experience not about to start now.
Will be looking to take things "easy" as and when the lockdown eases not work harder.

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By johnjenkins
24th Apr 2020 09:30

I think you're totally wrong Richard. There could well be a "mini" boom once we've kissed the EU goodbye finally but that will be nothing to do with Covid-19. In fact I see some sort of social distancing for some time to come. The world economy has to decide what it wants to do. My advise would be to wipe out all National Debt. That would be a good start. The reason I say that is because this pandemic should have opened the world's eyes as to how fragile life really is and to make sure practices are in place to cope in the future. That needs a particular mindset to spend an awful lot of money on what needs to be done. You can't expect each country, on its own, to cope. The WHO needs to get a grip and decide if it's a "name only" organisation or countries give it the power to deal properly with the world's health.

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By Jimess
24th Apr 2020 09:53

I would love to buy into that dream, and really hope that it might happen, but who knows how people will react once this lockdown is over. However given that people are asked to stay in their homes because of this rogue virus circulating, I personally think it will be a long time before any service industries where people gather will take off again. People are already twitchy and nervous in the supermarket queues, some masked up like something out of Star Wars because they are fearful of "what is out there and unseen". It will take a huge turnaround in public confidence before people will be happy to congregate again in any sorts of numbers. I may be wrong, but people react differently and its really hard to predict any sort of behaviour at the moment.

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By Justin Bryant
24th Apr 2020 10:01

I am still reeling in shock at another article by RM that does not mention nasty tax avoiders. Has he been replaced by an imposter? I recall some RM imposter activity a few years ago. See: https://justicefortaxesnetwork.wordpress.com/2013/01/16/horse-meat-in-bu...

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Replying to Justin Bryant:
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By AndyC555
26th Apr 2020 13:38

Not many mentions of tax avoiders lately on the RM blog although he is claiming that the government does not care and is deliberately using policies which will result in the unnecessary deaths of tens of thousands of the elderly and is 'delighting' in this;

"The fact is that anyone over a certain age now realises that the government's ongoing herd immunity policy, that is already unnecessarily killing tens of thousands of older people, shows that the government really does not care about those it considers elderly. This policy already makes it clear that those of about retirement age and above are now very obviously considered expendable. And this is unsurprising. Given that neoliberal politics in the UK long ago gave up worrying about how a government might provide for those enjoying ever longer lives I suspect that neoliberal politicians' delight that this problem is apparently being solved for them knows no limits:they will only see economic gain in this. They will simply be imagining the financial returns as all those pensions go unpaid."

A pretty shocking, and some might say vile, accusation.

I do wonder at Accounting Web giving a platform and thereby credibility to someone holding such extreme and inflammatory views at a time requiring national unity. After all, even the Daily Mail has stopped using Katie Hopkins.

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Replying to AndyC555:
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By johnjenkins
27th Apr 2020 09:43

It does seem strange that this virus targets, mainly, the elderly with problems. Is that the same with most flue-like virus?

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Replying to AndyC555:
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By philaccountant
27th Apr 2020 13:36

How is your response a refutation of what was written? The fact is the government did go for herd immunity at the start of this crisis and were told it will kill upwards of 250,000 people. You can't just pretend that didn't happen. They knew the risks and ploughed on.

It was the British public's demand for action that forced a change in policy, nothing to do with our government's care for its citizens.

And sorry but unity doesn't mean blindly accepting a politicians word. This isn't World War Two. We aren't fighting a foreign enemy. This is a virus we're up against and the policies set by this government did risk tens of thousands of lives before WE pressured them to change course. If you trust this lot with the lives of the people you love then you're a braver person than I.

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By AndyC555
24th Apr 2020 10:00

Thankfully, Richard's predictions made only a couple of weeks ago of "10,000 deaths a day" and "starvation" in the UK as a result of the coronavirus haven't come to pass. Only time will tell if his current predictions of "hundreds of thousands of excess deaths" and claim that there's an on-going and deliberate 'cover up' by the government about the true numbers of deaths turn out to be correct.

"there will be a rash of new restaurants to replace those that have gone bust". Quite possibly and it will be for restaurateurs to decide whether, as Richard explains, the likes of Dominos have got it wrong and that people don't like choice.

Still I'm pleased Richard is better from whatever it was he may or may not have had but surprised that he hasn't been tested for coronavirus as I had assumed that he had been as on his blog he said that doctors had told him he was no longer contagious.

Who knows, perhaps Richard's loss of business activity may result in him returning to practice? Lots of things have changed in the 20 years since he sold his last practice but if he needed any help or advice, that's what this forum is for and I'm sure there would be no lack of help.

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By AndyC555
30th Apr 2020 20:45

Sorry but it's difficult to take advice from someone who has just written on his blog that

“...given the dividend has a deemed credit attached to it in most cases (but not all) no income tax is due”

Four years after the dividend deemed credit was removed, Mr Murphy hasn't caught up.

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