Tax seasons in the UK are always hectic periods for accountants. Ensuring that all the clients of the firm meet their tax deadlines is never easy. However, the scale of struggle is expected to be higher than ever in 2021. If 2020 was about making drastic changes, 2021 would be even tougher for the UK?s accounting firms.
Tax return filings have always been resource-intensive processes. In 2021, accounting firms in the UK will have their burdening workloads amplified by the new Brexit regulations and the general tax-related fears amongst clients. Here are the key challenges accounting firms face as the tax season approaches –
Several accounting firms in the UK had to spend the entirety of 2020 reassuring their over-panicked clients. A recent survey suggests that these fears are set to multiply in the next few years because of cash flow concerns. 43% of small businesses in the UK state that their cashflow problems are worse than any issue they?ve faced in the past. Client cashflow struggles are major concerns for all accountants in the UK, and these concerns keep intensifying as the tax season approaches.
Major Policy Changes
In response to the pandemic, the UK government has introduced several relaxations to tax policies. COVID19 is deemed a ?reasonable justification? for tax delays. While that?s amazing for small businesses struggling to meet their tax requirements, it opens up a huge Pandora?s box for accountants.
Many clients are waiting for 3rd March 2021, the official budget date, to take important business decisions. All accountants must grasp the changes announced by the government on this day and convey that information to their clients as quickly as possible.
Working from Home
If tackling normal tax seasons was difficult, tackling them while working from home is set to be unbelievably challenging. Already the skills shortage problem in the UK is compelling many small-scale accounting firms to operate with small staffs. If these workers have to tackle the super-hectic tax season from their homes, they?re highly likely to experience ?burnout? or exhaustion.
Preserving client relationships, fulfilling compliance work, creating daily reports, etc. ? the list of chores for accountants is set to explode in 2021. If firm leaders don?t prepare for these upcoming challenges promptly, there?s guaranteed to be a progressive deterioration in the quality of their firms? services. Even worse, their clients may end up missing deadlines come tax season.
How an Outsourcing Strategy Can Help
Tax-related complications in the UK are not expected to get better anytime soon. In fact, most experts agree that changes like the new digital tax initiative (Making Tax Digital) will make lives harder for accounting firms in the UK. Hence, having an outsourcing strategy to deal with these upcoming challenges isn?t just a smart business move anymore; it?s almost a necessity for many accounting firms.
Large-scale accounting firms in the UK have been outsourcing their tax-related responsibilities to offshore accounting teams for decades. As a result, these firms are better positioned to deal with the upcoming tax season. A lot of these jobs involving the calculation of tax reports, preparation of reports from incomplete records, etc., go to India. Here?s why and how Indian accounting teams help accountants in the UK during every tax season –
Most accounting firms begin their search for offshore partners by conducting background checks or by asking peers for references. Providers of accounting outsource services in India are always mentioned in these references and recommendations. Why? Because India has one of the largest pools of accounting talent in the world. Plus, the Institute of Chartered Accountants of India (ICAI), the country?s leading accounting body, is very open to the idea of their accountants working for foreign firms.
The ICAI is the Indian equivalent of the UK?s Association of Chartered Certified Accountants. If a small-scale firm in the UK manages to land a team of offshore accountants full of ICAI-certified professionals, they?re in great luck. These accountants receive years of training and are essentially the cream of the crop of India?s extensive pool of accounting talent. Several leading accounting firms in the UK partner with ICAI-certified professionals because they know that high-quality output is guaranteed.?
Boosting the Number of Tax Clients
Forget letting go of tax clients because of limited handling capacity; accounting firms in the UK can potentially land more tax clients during the upcoming tax seasons if their outsourcing plans are managed effectively. Their accounting partners in India can help them cut down tax-related workloads. The free time can be used to land more clients or for venturing into tax advisory services.
While many accounting firms in the UK are being forced to downsize because of industry pressure, the ones with outsourcing partners are considering the exact opposite. Although Brexit and the pandemic have produced many challenges for the UK?s accounting firms, the ones with efficient outsourcing partners are viewing these challenges as opportunities. They are helping their partners in the UK prepare more taxes at faster rates!