Let's hear it for FreeAgent
Cloud accounting software group FreeAgent has launched a podcast channel, FreeAgent FM.
With guests from the accounting and small business worlds, FreeAgent FM offers fortnightly instalments of
debate, discussion and insight on topics such as practice growth, Making Tax Digital and the future of the
accountancy industry.
The first episode of the podcast is available to download now. It features FreeAgent’s founder and CEO, Ed
Molyneux, discussing the early years of the business and the challenge of developing FreeAgent into the product
voted Small Business Accounting Software of the year at the 2018 Accounting Excellence Awards.
You can subscribe to FreeAgent FM to receive automatic reminders of new episodes.
MTD: Is it all a bit too little a bit too late?
A no-holds-barred MTD brainstorm by industry thought-leaders rounded off an excellent IRIS World conference in London.
Steve Cox, the leading UK software group’s chief evangelist, led the discussion.
On the panel were: HMRC VAT policy lead Kamran Quadri; Anita Monteith, ICAEW tax manager; Lee Hawksworth HMRC's head of software developer collaboration; Companies House digital lead Ross Maude; and digital expert Will Farnell of Farnell-Clark.
Digital evolution
Will, who runs a cloud practice in Norwich, takes a positive approach to the digital evolution and is confident that his clients are MTD ready.
But he believes communication is vital. "We had a lightbulb moment when we realised that we hadn't talked to our clients.
"We had to reassure them that they were 'MTD ready' and that we were watching their backs."
Need for pragmatism
With the MTD VAT deadline of April 1 2019, looming large there is a clear need for realism and practicality. To that end there is much talk of spreadsheet "bridging software" and a "soft landing" to ease the new regime's mandation.
Politics is getting in the way. It's trying to make things happen too quickly. It's too fast for what business dictates
But, providing the alarming statistic of the day, Anita said: "About 40 per cent of VAT registered businesses don't know anything about it at all! And 89 per cent of businesses are doing VAT in the old-fashioned way."
HMRC's Lee Hawksworth said: "We have been improving and testing. April 1 2019 is not a cliff edge - it's the first point in a bigger transformation.
Good advice and education
"There are some big steps that need to be taken. Good advice and good education are essential." Lee recognises the importance of pragmatism. On spreadsheets, he said: "I wouldn't say that they have had their day just yet."
Ultimately there is still much scepticism in the industry over the way MTD is being mandated/implemented.
Anita said: "Politics is getting in the way. It's trying to make things happen too quickly. It's too fast for what business dictates."
And she said that the HMRC communications strategy was falling well short of what was required.
Even the HMRC's own man Lee admitted: "I personally get a bit nervous when governments start mandating technology solutions."
Quite. The powers that be are much better being left to deal with things like, er, Brexit...
IRIS draws up blueprint for success at Twickenham
IRIS will unveil its blueprint for accountancy businesses to thrive in the digital economy at its annual conference, IRIS World. The UK’s largest accountancy software provider will explain how it is setting the future standard for tomorrow’s practices while continuing to serve the firms of today.
IRIS will announce several making tax digital (MTD) developments to ensure accountancy professionals are ready ahead of the MTD deadline of 1 April 2019, as well as further products and services to make accountants lives simpler, more effective and more productive.
Sion Lewis, CEO of IRIS Accountancy Solutions explains, “As the industry transforms, services are advancing beyond compliance services to business advice. Our blueprint sets out the journey for accountancy firms to digitally manage and optimise every step of their client journey, from first touch to filing of final accounts. This wealth of client data also enables practices to develop new services as well as streamline business processes.
Future standard of the industry
“We are looking forward to revealing the future standard of the industry which will liberate the desktop IRIS compliance suite data and extend the scope of the software to serve the needs of practices as they thrive in the digital economy.”
Sion Lewis will commence the day’s proceedings, setting out the IRIS strategy and highlighting new products. Chief product and marketing officer, Nick Gregory, and Steve Cox, chief evangelist will detail the product strategy in context of industry progression. Lee Hawksworth, HMRC's head of software developer collaboration, will explore what lies beyond MTD for the government.
IRIS will also host an industry panel with the leading figureheads of HMRC, Companies House, ACCA, ICAEW and ICAS debating the impact of the digital economy, technology and legislation on the accountancy market, the problems that await and how the profession will have to evolve.
Why MTD is a journey not a destination
First of all, let us be clear – making tax digital (MTD) will happen in one form or another.
Many of the accountants we speak to still believe that MTD will be scrapped due to cost, logistics or Brexit (or other political considerations).
But as recently as 13 July, HMRC reiterated the current deadlines on the UK government’s own website.
I think, however, what is up for debate is the eventual form that MTD will take, the speed of its implementation and what facets of it will go live, when and in what order.
This is why I believe that MTD is a journey, not a destination – accountants, taxpayers and HMRC are all working towards a 21st century approach to accounting, reporting and tax gathering.
Given the speed of technological advancement, don’t be surprised if MTD evolves mid-implementation.
Smart assistants
If you think I am exaggerating consider the partnership between Amazon and HMRC to use the former’s Echo devices and Alexa smart assistants to remind people about tax credits.
This is more PR than process at the moment. But it has already led to tabloid headlines such as “Alexa… Pay My Tax!”, which give the impression that people will soon not have to touch a keyboard (or even a touchscreen) to file their accounts with HMRC.
This is why, as a software developer, I am only looking to implement functionality as and when specified or needed by either HMRC or accountants themselves.
To do otherwise would be costly, presumptive and potentially a waste of time, and that misspent development cost would have to be passed on to the end user… that’s you, the accountant!
This is not meant to be a dig at other software developers or a sales pitch, but a statement of fact.
Hopefully, it articulates an ethos I think all concerned with MTD would be wise to adopt, as it will result in a practical and effective adoption, and not failure or panic.
I suspect that despite my arguments above, many of you remain sceptical as to whether MTD will eventually see light of day, but I want to give you another perspective.
In a past life, I was a derivatives trader in the City of London. Our successful trading strategy was to identify the particular fundamentals behind a situation or a proposition and to base our investment decisions on what those fundamentals told us. With this mindset, I think the following three fundamentals make MTD inevitable:
- The government must become more efficient, reducing and optimising it overheads, which it could achieve, in part at least, with a successful, consolidated digital strategy.
- The government must maximise its tax receipts, which it could achieve with the transparency brought by a successful, consolidated digital strategy.
- The government must improve its cash flows, which it could achieve if all taxes from all taxpayers, not just VAT, were paid quarterly based on quarterly reporting, instead of nearly two years in arrears with carefully chosen year-end dates.
Given these three fundamentals, MTD is the ‘Occam’s razor’ to take to all these problems as far as the UK government is concerned. Electronic submission of taxes will mean (in theory) the automation of tax returns, analysis and investigations, which will help to lower the overheads and staff requirements of HMRC.
Huge opportunity
Demanding quarterly payments of tax owed will address the government’s cash flow and revenue forecasting problems.
If you think there is another way that the UK government can meet the objectives that I think underpin the MTD project, I would be interested to hear them.
I think MTD provides a huge opportunity for accountancy as a sector and it shouldn’t be seen as a threat.
However, remaining in denial about the inevitability of MTD will lead to the failure of your practice, because the accountancy world outside is changing, and you are not.
The way you work will soon cease to be viable, so I genuinely urge all accountants who have yet to embrace the digital revolution to do so for their own sakes, and not just for the benefit of software developers like me.
MTD won't immediately solve HRMC’s problems, nor does it necessarily mean extinction for an older generation of accountants (if they’re proactive).
But it is a journey that we are all on, with the destination being a hazy landmark on the distant horizon. It is a journey we’ve all undertaken (either by choice or circumstance), and it is one I am glad to be on, and one that I want to enable others to make.
ICAEW tax conference: from a non-accountant's viewpoint!
I never thought I'd hear myself saying: "I've just been to a chartered accountants' conference about tax and really enjoyed it."
But that's exactly what happened to me last Friday when I popped up to the City of London for an ICAEW event entitled Deconstructing Tax.
Now, I'm not saying I understood everything that was said, nor am I going to drop everything and retrain as a CA. (For a start I'm 56 and, even if I were a bit younger I don't think my brain would be up to the challenge!)
Number crunching contemporaries
But I learned a lot and, hopefully, my face will look slightly less baffled next time I'm chatting accountancy with my number-crunching contemporaries.
First up at the grand HQ of the Institute of Chartered Accountants England and Wales was renowned tax expert and lecturer Rebecca Benneyworth.
She took to the stage gingerly, wearing a leg-supporting boot following an accident. But Rebecca still delivered her session with amazing energy and poise, keeping her audience interested in key tax issues of the finance bills of 2018-19 for a full hour.
Even with a few amusing asides on Teslas (of which she is a proud leasee) and family matters, that's no mean feat.
On the side of freedom
John Cassidy, partner at Crowe Clark Whitehill LLP, focused on HMRC inquiries - their myths, developments and cases.
With a fairly low-key style John is incredibly detailed and well informed - and firmly on the side of freedom of the individual.
On the Data Protection Act, he says: "The idea is to protect data, not make you give it up." This refers to some of the fast-and-loose practices adopted by HMRC inspectors in trying to extract information.
John is excellent at getting to the point...
"The power to inspect does not allow a search for assets or documents. Inspect means to look at what you can see but not look for something you can't."
And as a rule of thumb: "Inspect is by eye, search is by hand."
Technical and challenging
"Topical issues for owner managed business sales" does not sound that enticing. But Peter Rayney makes a technical and challenging area accessible with an injection of energy, dry humour and imagination.
For instance, his examples of companies being bought, sold or hived down for the purposes of Substantial Shareholding Exemption take on the guise of Seventies music heroes. So Baez Ltd is owned by Joan and Bob (presumably Dylan).
Or The Motown Group plc sets up a trading subsidiary called (Stevie) Wonder Ltd. In the degrouping portion of the talk we are even introduced to Coldplay Ltd.
Great stuff but, for now anyway, please address your SSE questions to Peter.
Cybersecurity issues
Donna Dimmack of Lloyds Banking Group led the conference into lunch with a light, user-friendly but relevant presentation on the all too serious issue of cyber-crime.
Judging by the lively QA session at the end, I get the impression we should all be doing more to improve our online security and vigilance.
Off-rollpayroll working
After a little time to network after lunch, it was back to business when the focus turned to the hot topic of off-roll payroll working.
Sharon Cooke of accountants' training group Swat took on IR35 - Reflecting on the public sector changes.
IR35 is set to rumble on and on ... in fact the ICAEW is running a webinar on this very subject on October 24.
ICAEW on tax and MTD
The day concluded with some practical points from the ICAEW's Tax Faculty team.
Frank Haskew, Anita Monteith, Sue Moore and Carol Miskin provided valuable insights on the profession's thinking on subjects such as Brexit, agent services accounts and amending corporation tax returns.
On Philip Hammond's Budget, set for October 29 the ICAEW has one simple message: "Don't do anything!"
I couldn't have put it better myself.
And capping off an educational day, who better that ICAEW president Paul Aplin on the perils and pleasures of MTD!
Accountex steps up call for women speakers
Diversity and gender equality are rarely out of the headlines in the accounting profession media, whether it's partners in practice or pay parity.
In 2018 Accountex made big steps towards increasing the number of women speakers on its agenda-setting theatre programme.
The line-up included: HMRC boss Theresa Middleton; accountant and author Della Hudson; marketing expert Amanda C Watts; AI authority Caroline Plumb; and of course, Elaine Clark of CheapAccounting with her popular round table sessions. To name just a few.
Women in Accountancy
Also, at Accountex Summit North, the Women in Accountancy group was set up.
For 2019, accountancy and finance's biggest event - at ExCeL London on 1-2 May - is taking even greater strides to boost the number of women on the speaker programme. With that in mind, it has launched the Woman in Accountancy “Speak Up” Campaign
Accountex portfolio event director Zoe Lacey-Cooper says: "One of the most interesting discussions that we had at Accountex was about the lack of women speakers on the programme, and how women are less likely to put themselves forward to speak and why woman are hesitant to speak up.
Submit speaker sessions
"So for next year’s Accountex programme we want more woman in accountancy to “Speak up” and encourage more woman to submit speaker sessions.
"There are many woman influencers and experienced accountancy professionals, and many have probably got some great case studies and experiences to share with their peers."
Zoe, who is spearheading the campaign alongside Elaine adds: "Standing up and speaking to an audience can be daunting, but we want to help and support those who would like to try it out and offer guidance from an experience presenter trainer who is also familiar with the accountancy profession.
Help and support
"Accountex has found a professional presenter trainer who not only runs her own accountancy and bookkeeping firm but is who is a drama teacher for Disney!"
That is Alexandra Bond-Burnett runs Bond Ambition and is keen to get involved in training accountants to be more confident with public speaking.
So please speak up! And talk to us on how we can help you speak on the Accountex programme in 2019.
Accountex launches the search for speakers
Whether you’re a new kid on the block or a seasoned campaigner, there could be a place for you in the limelight at Accountex 2019.
So, if you have something to say and you'd like to share your insights with accounting's key influencers at London's ExCeL on May 1-2 next year, get in touch with the Accountex team. Because they've just launched their call for 2019 speakers.
Accountex London is one of the biggest (CPD accredited) accountancy and finance events in the world. It attracts more than 8,000 visitors over two days and hosts 270 exhibiting companies.
The event team works closely with experts and thought leaders across the sector to offer 200 speaker sessions in 11 theatres.
Key influencers in accounting
"Last year we had speakers from all over the world on topics ranging from GDPR and MTD to Blockchain and bookkeeping, "Zoe Lacey Cooper, Accountex portfolio director, says.
They included HMRC chief Theresa Middleton, investment guru Justin Urquhart Stewart, Intuit QuickBooks' European chief Dominic Allon and tax expert Rebecca Benneyworth.
Adds Zoe: "We are looking for speakers who can creatively explain and contextualise the latest trends, challenges and issues that the accountancy and finance profession is facing now and in the future.
Long-term challenges
"If you can offer fresh angles on long-term challenges so much the better."
So, if you would like an opportunity to present at Accountex, please click on the link below to submit your speaker submission form.
Steering committee
Accountex has a steering committee that will verify all submissions and plan in the full programme in December.
You have until 5pm on Wednesday 28 November - so please get your entry in as soon as possible because we will not be able to extend the deadline!
Click HERE to see how to complete the form and get involved.
See (and hear) you next May!
BrandWatch: How to beat the compliance complexities of GDPR
A compliance tool that helps accountants navigate the complexities of GDPR and stay on top of their obligations is making waves in the software market.
Using its award-winning product design and practice know-how, TaxCalc has created GDPR Centre. It also provides the capability to respond effectively in critical situations relating to personal data. For example, if a data breach occurs or a data subject access request is received.
Using TaxCalc’s intuitive workflow SimpleStep, GDPR Centre not only makes it easy to demonstrate compliance, it covers off specific situations relating to GDPR and day-to-day practice tasks, such as creating sets of accounts, generating tax returns, bookkeeping and payroll functions.
TaxCalc’s "Check & Finish" validation tool comes into play to flag any potential errors or mismatches of data.
GDPR Centre enables accountants to:
Record data breaches – and help prevent them from happening again
- Fulfil, track and file data subject access requests
- Complete comprehensive checklists of GDPR-compliant policies and procedures
- Log the appointment, training and actions of the data protection officer (if applicable)
- Carry out annual reviews of data processes
- Record the kind of personal data being held and the lawful basis for holding that data
- Create risk scenarios to test how a practice might react to a variety of situations
- Record any data organisations a firm might work with
Every required action is easy to understand and carry out, with instructions and technical terms written in jargon-free language, and supported with reference to official guidelines and video tutorials.
GDPR-friendly features elsewhere in the TaxCalc suite
TaxCalc is committed to making the transition and adoption of GDPR as simple for practices as is possible. Earlier this year a number of GDPR-friendly features were also released:
- Consent management in TaxCalc’s practice management ‘engine’ Client Hub, for keeping track, managing and reporting on the consent to specific types of communications clients have agreed to
- Updated engagement letters for GDPR Compliance in the Mail Merge section of Client Hub
- Data secure, PDF Encryption add-on module for TaxCalc Tax Return and Accounts Production products
Over the coming months, TaxCalc will see the introduction of new tools and enhancements to create a robust, integrated, GDPR and MTD-enabled practice management suite aimed at firms large and small.
TaxCalc GDPR Centre is available to buy now for £125.
Thinking of selling the practice... 'tis the season
Listening to Time of the Season by The Zombies put me in mind of the different seasons in the accounting marketplace.
Although, for many, the workload in professional practice is consistent throughout the year, for others the sector is seasonal with peaks and troughs marking the passage of time.
For those of us with children we are possibly even more aware of the relentless ticking of the clock as we watch those children grow, travelling through this journey of life.
In accountancy the ‘seasons’ are, of course, marked by milestones such as Self-Assessment (for many a time of chaos and stress) or the ‘Ghost of Tax Return Season from Januarys Past’ casting its dreaded shadow over Christmas and new year.
Year end deadlines
Then we have the financial year end in April and the deadlines it brings; the changes to be implemented, updates to be made, professional development to be completed.
There are quarterly budgets that herald changes affecting the client, the sole-traders, the collaborators, the SMEs, the investors, the forward-thinkers, the professionals, the care-givers, and the care-takers.
Then we have the usual deadlines – submission of VAT, PAYE and corporation tax – to remind us that the clock keeps ticking.
These markers represent distinct seasons within the associated mergers and acquisition market, too.
Quietest season
For the brokers and agents who facilitate the purchase and sale of goodwill, January is often the quietest season.
That's when many keep their heads down and plough through stacks of files, chasing clients, inputting calculations and quietly contemplating the next stages of their professional lives. That could mean an exit, growing the practice, or simply implementing a more effective staffing structure.
For the overworked, it is usually the Self-Assessment season that feeds the desire to find the relief that they seek. If that solution is an exit, then the leap is most likely to be made shortly after the SA season has ended.
Perhaps on return from a precious post-January break, is when the broker’s phone is most likely to ring, signalling the start of the first annual selling season.
Ambitious practitioner may strike
That is also when the ambitious practitioner may strike, setting the wheels in motion for looking at ways to grow – perhaps by acquisition.
Thus February through to the summer holidays is the busy season as merging partners are sought, acquisition opportunities pursued and prospective vendors are tempted out from remote corners by offerings of attractive multiples, short payment schedules and flexible terms.
Then, almost as suddenly as the selling season began, the seasons change once more and for the broker it all starts to quieten down again as we enter the summer lull.
So what is it that makes the autumn the busiest M&A season of them all?
Could it be the sweet nostalgic taste of those heady weeks on the beach in the sun still on the lips but fast becoming a dim and distant memory? Or could it be the anticipation of another January that weighs heavily on the practitioner’s mind? Please take note, my ambitious friends – this second annual selling season could represent rich pickings for the acquisitive accountant if they are prepared to act now!
Emergency exit
As Christmas approaches once more the buying/selling season abates, as those who don’t have the luxury of sufficiently motivated staff and smooth-running systems get their heads down, instead changing their focus to the latest revisions, implementations, complications and not to mention tax – will it ever be made digital after all – or perhaps it can be avoided somehow, maybe via a swift (emergency) exit?
If you want to make a change, whatever that change may be, autumn could be the next best time to make it happen, for now is the Time of the Season. Tick tock. Tick tock.
This article also appears on the ICPA website. Dedicated to supporting and promoting the needs of the general practitioner. You can find them at www.icpa.org.uk, email [email protected], by phone on 0800-074-2896.
BrandWatch: Elaine Clark to advise Coconut
Award-winning accountant Elaine Clark is taking on an advisory role at Coconut, the online current account for freelancers and the self-employed.
Elaine created the Cheapaccounting.co.uk franchise to make small business accounting as efficient and cost effective as possible so this move makes perfect sense.
Sam O’Connor, Co-Founder and CEO says: “Coconut is bringing banking and accounting together to eliminate business admin for self-employed people and small business owners.
Real-time bookkeeping
"But we want the accountants our customers work with to also benefit from real-time bookkeeping and rich data because this saves everyone time and money.
“90% of businesses in the UK are owner managed and 90% of the growth in small companies since 2001 are non-employers. These businesses tend to have simpler requirements than bigger businesses but the products out there are complicated and dated, so haven’t kept up with the shift in the market.
"We think that these firms and the accountants that support them need access to the most advanced technologies and Coconut will provide this in a tailored product.”
Working with the coconut team
Elaine says: “I’m really excited to be working with the Coconut team as they build out the accountancy offering of their product. I think the convergence of banking and accounting will be more transformative than cloud accounting was 10 years ago.
"We want accountants to be able to harness the full potential of technologies like machine learning to enable them to better service their clients while also improving margins and allowing them to grow their practices. Coconut will soon allow them to do this in a single tailored product.”
Community of accountants
Coconut is building a community of accountants in a Facebook group called Coconut Partners. In the same way that customers have been a driving force in the development of features, they aim to do the same with the accounting community.
Coconut is an app-based smart current account combining banking, accounting and tax services designed specifically for the UK’s fast-growing freelance and self-employed workforce.
The company launched its iPhone app for sole traders on 31 January and has opened 2,500 current accounts with £10m payments processed. Last week, Coconut pre-approved the first Android customer and continues to build features to support sole traders and in the future limited company contractors.
Coconut was founded by Sam O’Connor and Adam Goodall who met 10 years ago when training as accountants at PwC. They started freelancing after selling their first business, a FinTech company called ProConfirm, to Confirmation.com in 2014. Coconut is backed by leading tech accelerator, Techstars, and was named one of the ten winners of the Nesta Open Up Challenge, a competition to award prizes to innovative businesses using new Open Banking APIs.