Inspired by the premise of a recent BBC radio series, Richard Sergeant finds out if seeing the UK profession through the eyes of an Australian counterpart sheds any light on where we are.
Giving his impression from Australia is Neil Wickenden, tax consulting partner in the Sydney office of HLB Mann Judd. Wickenden is former state chair of The Tax Institute (Australia) and currently chair of the Society of Trust and Estate Practitioners Australia.
The roots run deep with Australia for obvious reasons, and the parallels in terms of standards and the legal framework continue to exist. It’s interesting to see how this can help even small businesses become international.
Access to available data from a more digital tax authority is certainly of note, mainly for a glimpse at what may be heading our way in terms of income tax, and its general acceptance by taxpayers - which could be at odds to how things will progress here if MTD for VAT is anything to go by.
And even though there seems to be a general acceptance of technology within businesses, there are reasons to think that the role of an accountant and trusted adviser can continue to evolve - even as the obvious pressures come to bare.
What is your impression of UK accountants?
I spent my very formative years in London, so for me it’s quite easy to relate and to empathise with our accounting cousins.
For me the similarities are rooted in our professional bodies. They are quite similar, their rules and guidelines are familiar to each other, and I suspect the Australian institute was actually modelled on the UK. So to that extent we have a common ethical base, and professional standards are taken as a given.
Content seriesView full content series
Our legal system is similar as well, for example with common law. So when it comes to taxation this is particularly relevant and we know that there is a common understanding about how the rule of law, courts and judiciary work.
The differences really come down to opinion. Some observers would say that practitioners in Australia see themselves as being a bit more relaxed and even more entrepreneurial than those in the UK.
In other words, in the UK they are a little bit more conservative and staid. By the way that's an impression that goes further than just the accounting profession. Having said that, I’ve always found in my own dealings that they are very professional, helpful and imaginative.
What about temperament?
There is an impression some have in Australia that compared to them, UK accountants are slower to adapt and to change. Although I have to say I’m not sure there's a lot of evidence for this. I think this one is perception rather than reality.
Are UK firms good at looking outside of the UK?
We do deal quite a lot with overseas firms of accountants, especially with those within our global network. And it’s much easier for a business these days to operate online and get an almost instant international presence.
Because tax is such a relevant international matter, we are frequently dealing with enquiries from overseas firms, including quite a few from UK, which incidentally is at about the same rate as those coming from the US.
So it would be unfair to see both the trading businesses of the UK and their advisers as inward facing in my view, quite the opposite.
What about the role of technology?
Generally speaking, Australians are quite early adopters of new technology and willing to give things a go. Business and public consumers are quite open minded to new tech, software and apps, and there is a potential good market here which you can see reflected in the amount of start-ups and general activity there is.
Subsequently the impact of technology on the profession has been significant. One dynamic is that it is certainly making the provision of compliance services very competitive, and that fee pressure has been felt.
Secondly, the regulatory authorities have also been quick adopters. This has meant better communications between those that hold data, and between the authorities and the individuals or business. It’s also of course improved their own enforcement capabilities.
Have pricing structures also changed?
Yes, for a number of years now there has been pressure on professional fees for purely compliance services such as regular (eg monthly) management accounts preparation, year end financial reports, and income tax return preparation.
The availability of software that is itself less costly than in the past and is more easily applied has been driving this. But we’ve also seen an increasing number of accounting and related services providers, many of whom are not members of the traditional professional bodies.
They don’t the same cost structures, undertake CPD, bear the cost of having reviews conducted by their professional bodies, or carrying minimum levels of professional negligence insurance.
Software opens up many doors, and you might see more of this in the UK in due course.
Are there lessons as we enter a more digital tax regime?
I think the regulatory authorities are onboard with adopting technology, and to an extent it has made our lives easier and our own jobs a bit better.
What the Australian tax authority has been doing is getting lots of data from the employers, interest data from the banks, information about dividends etc. and collating them securely online for taxpayers to view. When you come to filling in your tax return alot of data is already there, not all of it but a significant amount.
Saying this, by and large most individuals will prepare and lodge via a tax agent. But to have most of this data there is definitely useful, as we can concentrate on what is not there, and the application of our knowledge and experience to bring the best outcome.
It’s interesting to hear about what’s happening with VAT, and mandating the use of software, which is not where we are at the moment, so in this respect the UK may be ahead.
We also have state government, as well as federal. The federal authorities are also now sharing more information with the local government to profile and take data much earlier on, and use it to decide things like audits or commencing enquiries.
And interestingly, because it has happened overtime, it’s just accepted practice.
How do you think recent political events will impact?
Australia generally is concerned about the possible recessionary effect Brexit might have, and indeed the trade war with US and China. But we’re also starting to see our housing bubble starting to collapse and that’s another risk, so the world economy and its impact on our relatively small economy is on our minds.
Are UK accountants commercial?
We see UK accountants as having a suitably commercial approach as Australian accountants. We also see a focus on efficiency, and being well rounded, which is more of a strength than a weakness; and to be a little more conversative is not a bad thing - this reflects the professional work that we do, and the way that we approach things.
About Richard Sergeant
Specialist insight and business development support for accountants and their vendors. Cloud advocate with a pragmatist eye.