The title of this article is a play on Who Moved My Cheese a cleverly written book by Spencer Johnson about dealing with change. Apparently, we are fearful of change because we don't believe we have any control over how or when it happens to us. This book explains in terms that anyone can understand - that what matters most is our attitude to change.
The Chancellor of Exchequer has announced that by the end of the current Parliament digital tax accounts will be introduced where 50million individuals and small businesses can see and manage their tax affairs online. Taxpayers will be able to settle taxes throughout the year and change their tax codes rather than dealing with the hassle of paper or online filing deadlines. In his March 2015 Budget he subsequently announced the abolition of the annual tax return.
So how will your firm deal with demise of the personal tax return?
Well at some stage in the not too distant future you will need to look at your staffing levels. It is clearly not going to be financially viable to retain a personal tax department in order to assist the few clients who have complex tax affairs.
Managing staffing costs is one of the biggest challenges facing every business, large or small. One way to effect cost savings in this situation is to outsource specific business operations to a third-party provider. In addition to the cost savings, outsourcing allows you to acquire a flexible resource and potentially provide you with increased operational efficiency. Perhaps most importantly, it allows your staff to focus on delivering higher fee earning work, building and maintaining client relationships and growing the practice. With the loss of revenue from personal tax compliance work, maintaining client relationships and growing your practice, becomes that much more important.
Talking of outsourcing, this could be a service that accountancy firms might want to consider offering to replace the lost revenue from tax compliance work. The current economic climate has re-emphasised to the business world the importance of keeping costs to a minimum and being as efficient as possible. This has encouraged the growth in the market for business process outsourcing, a service offering accountancy firms are well positioned to take advantage of.
As stated at the start of this article, what matters most is our attitude to change. It is clear that change is coming, so savour the adventure and look forward to enjoying the taste of New Cheese!