At this point last year, when we were looking forward to 2021, many were expecting a return to business as previous, with government pandemic support drawing to a close and an assumption that vaccination would minimise the ongoing impact of Covid-19. The reality has been somewhat different, writes John Edwards, CEO at the Institute of Financial Accountants (IFA)

We have had a year with the continued trials and tribulations of a global pandemic, coupled with the realities of a no-deal Brexit, supply chain issues, unique cashflow challenges, rising costs, staff shortages, and an expectation that many of those temporary adaptations will now become long-term business operations.

This has created a fundamental shift in many business practices and an essential pivoting of services.

Setting these challenges aside, my reflection of 2021 is largely positive. We have seen the continued growth of our sector through increased demand for our unique and solution-oriented advisory services. Accountants have flourished, embracing ever more complex changes in legislation, and supporting businesses to survive and thrive during challenging periods.

One interesting development for me has been the appetite for deepening international connections, as we see international accountants reach out to learn from UK best practice, and also see UK accountants and practices establish international offices or partnerships for the very first time. It seems, perhaps, our exit from the EU has created necessary demand and opportunities for practice outside of our borders.

Digital transformation has continued, not only with more and more services moving online, but also knowledge sharing through conferences, board meetings and local meets. The thirst for bitesize, practical advice and training has never been higher, reflecting on an increased requirement for real-world, up-to-date advice.

Consultation and change

As predicted, 2021 has been a year of huge legislative consultation and change.

The IFA has responded to 11 government consultations, spanning everything from economic crime and fraud to the role and effectiveness of Companies House, the role and effectiveness of HMRC, simplification of the tax system, reform of the basis period, and timely payments.

We have challenged the government on the assumption that professional indemnity insurance will in any way raise standards of unqualified accountants, and have separately consulted on emerging threats to the sector. New legislation has also come into force, so accountants have had to tackle Making Tax Digital 2, IR35 changes, post-Brexit sanctions and trading changes, and VAT reverse charges to name but a few.

Looking ahead to the coming years, we surveyed accountants to establish their key areas of concern. As well as the expected challenges around technology and automation, members also expressed growing concerns about the pace of changing accountancy regulations, as well as the wider long-term impact of Covid-19 on the economy.

Also making an appearance were cryptocurrency, blockchain, AI, and cloud-based technology, the majority of which accountants feel ill-equipped to fully handle.

With around 5.5 million small businesses operating in the UK, accountant support will remain paramount, delivering trusted advice to help emergence from the downturn of the past 18 months, with SMEs at the forefront of economic recovery. Accountants will continue to provide added resilience to small businesses by helping them to look ahead, identify opportunities, grow and future-proof their businesses, and share expert knowledge and advice in a range of areas, including access to finance.

It is clearly important for accountants to keep up with the pace of change in regulations, legislation and digital technology to provide this ongoing support. What we also need, however, is for them to go one step further, identifying and adopting learning for future trends to support long-term growth. One thing that comes to mind is tackling climate change, and accountants can be well placed to help SMEs complete complex calculations and identify their climate impact.

The government’s SME Climate Hub provides useful advice and those that make the SME Climate Commitment will be recognised by the United Nations Race to Zero campaign too. Ultimately, this will be an essential part of business, and I see a deep opportunity for accountants here, and generally for ongoing advisory support.