2020: Predictions for the year ahead in accountancy
AccountingWEB's anonymous partner looks ahead to 2020 and makes a series of predictions about what the year may have in store for the world of accountancy.
It may just be me but new year’s resolutions tend to be both ephemeral and tedious. I have no intention of joining a gym, will not give up smoking and cannot imagine getting through 2020 without imbibing at least a small quantity of alcohol.
Therefore, rather than making a plethora of empty promises, I thought it might be more interesting to come up with a few predictions as to events that might take place and which would have significant influence on the accounting profession.
It seems certain that the country will take the first steps towards leaving the European Union in the next month or so. Since it will be impossible to get any kind of comprehensive or meaningful trade agreement with Europe by the end of 2020, the question arises as to whether our esteemed Prime Minister chooses to:
- Leave without a deal;
- Leave with some kind of cosmetic series of tentative agreements which mean little; or
- Extend the deadline.
This may not be strictly linked to the profession but since it will affect our market and ability to recruit staff, every accountant should be taking the issue seriously.
A Budget at last
Sajid Javid will finally deliver a Budget, having had his last effort pulled at a late stage and exchanged for an election. This is certain, but what he intends to announce is far less clear.
Having given up on increases to income tax, NIC and VAT, he will need to look elsewhere to raise funds. Tax avoidance must be an opportunity for rich pickings, as well as attacking multinational technology companies.
The only problem with the latter strategy is that if the UK wishes to negotiate a trade deal with the United States that is only fairly unfavourable, then President Trump has already made it clear that he will not take kindly to such proposals.
I can’t see the Chancellor raising capital gains tax or inheritance tax, although the opportunity is there. These don’t bring in that much money anyway and will be a slap in the face of the voters (and donors) who helped him back into office.
An attack on expats and Non-Doms would be equally politically inept and therefore unacceptable.
What does that leave? Your guess is probably about as good as mine.
New audit regime?
Hidden away while we were wrapping our Christmas presents were the headlines following an investigation by former Stock Exchange chairman Sir Donald Brydon into the auditing profession. Put simply, his conclusion is that it is not fit for purpose, while the FRC was already on its last legs.
Presumably, his ideas will be met with howls of anger and derision from those who are attacked, carefully muted when responding publicly. One consequence is that a new qualification might be in the offing, which could be bad news for middle-aged auditors who thought that their examination commitments had ended decades ago.
It is going to take some time for any recommendations to be implemented and, I fear that this means many more companies will go under, leaving employees, pensioners, investors and even the government on occasion, out of pocket.
Other items of interest
Insolvency could also be under the spotlight since it was highlighted as an area of concern In the Conservative Party Manifesto.
Finally, to me the top end of the accountancy market looks overly crowded. Therefore, I’d be surprised if there wasn’t a merger or two (spot the euphemism for failing practice getting taken over) in the top 20 over the next 12 months.
To misquote Robert Kennedy’s Chinese curse, accountants live in interesting times.