MTD takes it toll on accountants’ stress levels
Richard Sergeant explores the strain additional compliance like Making Tax Digital has had on accountants’ mental health.
The impact of MTD has pushed some practitioners to sale up and exit the profession. These pragmatic elements overlay a more hidden aspect of the profession around illness – both physical and mental, which is also having an impact.
The recent news that a third of accountants feel stressed everyday and Philip Fisher’s advice that ‘accountants should take a deep breath’ has brought some of these issues back into the spotlight. However, recent interviews and conversations have underlined how MTD has further exacerbated these issues.
Content seriesView full content series
At the recent Thomson Reuters Synergy conference, a conversation with an attendee, who wished to remain anonymous, revealed their anxieties of feeling overburdened with the pressures of relentless compliance and process change and ill health.
“Over the last five years or so I’ve found myself working longer hours, even with an increase in staff and fairly good adoption of cloud bookkeeping with my clients.
“The strain of constantly having to work through additional compliance such as GDPR and MTD has taken their toll on my health. I had something of a breakdown in 2018, and my doctor has pretty much told me to retire, but I’m not in a position to do that yet at 58 years old,” said the accountant.
‘Not the profession they joined when they qualified’
Jeremy Clarke, member services at ICAS, is not surprised of the impact MTD has had so far.
“It’s one additional thing that has added to a stressed part of the profession. The way it works with HMRC at the moment, the processes have not been without problems. What practitioners are experiencing can feel disjointed and stressful – and for people who are already very busy, adding this to the mix is adding to the stress.”
Nicola Draper, from broker Draper Hinks, sees and hears this from very many small practitioners. “MTD is the straw that breaks the camel's back. They say to me that they don’t want to have to do it anymore, and it’s not the profession they joined when they qualified. For them, the problem is clear: too much emphasis on systems and not on relationships.”
Without overstating the fact, Draper reflects that the older generation of accountants have benefited from a stability of their client base, and building up relationships that have lasted a long time.
“The old guard was all about knowing your clients and adding value. They would have gone to clients’ weddings and graduations – and possibly looked after the family successors within the business. It’s becoming less and less like that, and some are finding it hard to adapt.”
Accountants are fast becoming GPs
Clarke draws an interesting comparison with another profession that is more publicly visible as being under pressure. “The accountancy profession is rapidly going the way of GPs, where professionals are holding things together in a system that is harder to work within.
Industry insightsView more
“There is a largely hidden issue with accountants and mental health issues, as they need to be seen as being in control but underneath there is a lot of really stressed people.
"HMRC are now largely reliant on accountants to implement new initiatives and we are just about able to cope. But any further expansion of MTD at the moment and we will see many more who are not able to deal with the pressure.”
More than just MTD
To be clear though, what we are not talking about is MTD being a standalone cause, but a part of the fabric of the profession changing, and other long term issues building up.
“Added to the other pressures around inadequate pensions, succession, workload, ownership and how hard it is to bring the next generation through, those running their practices are already working to a high tension already”, explained Clarke.
Mistrust of clients can hinder
MTD has also revealed a tendency for some accountants to shoulder much more of the responsibility believing their clients unable or disinclined to change.
Draper, in particular, recalls that “It’s not they don’t want to change, but a belief that their clients are incapable of doing something different. The phrases ‘Our clients don’t like that’ or ‘They wouldn’t know what to do and make a mess of it’ we hear too often.
“What they are really saying is that there is a mistrust of their clients ability to change, or cope with something different - when quite often they will be perfectly willing or able if they are shown,” concluded Draper.
The solutions are not always easy to find
For Clarke, one of the ways to help cope with the pressures of MTD and make a decent exit is ironically to embrace it as much as possible.
“Simply, if you’re MTD ready you will get a better price for your firm or fees. Saying that, there is always an improvement to be made within the client base and that will help drive the efficiency of the practice and help improve things.”
However, for some, change has already come at a price. And further change becomes progressively harder. “We are dealing with a number of vendors who are seriously ill and who have had heart attacks, so the amount of preparation they can put into digitising their practice now and getting the best sale price is very limited.”
The compliance challenge will intensify
As MTD eventually grows in scope, Clarke raises the prospect that this will enforce further change.
“You can no longer ignore the problem and hope it goes away. The next problems are already on the horizon as over the next five-to-10 years will see more and more change as the digitalisation of tax continues.”
The ability to cope with more process change, both within the practice and helping clients manage any new digital record keeping and reporting requirements is likely to keep practitioners very busy for the next decade. Those able to cope with the compliance demands, particularly in terms of workflow and data volume are more likely to benefit.
In the meantime, there is still a community within the profession that will find this transition very tough indeed.