The Leaders Council recently held a series of roundtable discussions with leaders from the world of accountancy to address the ongoing challenges and pressures they face in their profession. The discussion brought together representatives from the sector to share their on-the-ground experiences and offer unvarnished insights. The purpose of the roundtable was to build connections, provide support, and recommend solutions to parliamentarians in order to combat the rise of unregulated accountancy firms. The below is a summary of the discussion points from the attendees.
The issue of unregulated and unqualified accountants operating in the UK has become a major concern for both consumers and qualified professionals alike. With the rise of online services, it has become increasingly difficult for small businesses to identify qualified and reputable accountants, putting them at risk of fraud and financial loss. The need for action in this area has never been more urgent, and there are several steps that can be taken to better inform the public and protect consumers.
One key step is to follow the example of the British Bankers’ Association and have clear warnings on websites such as HMRC and Companies House, informing the public to check their accountant's qualifications before filing a tax return. This would serve as a valuable reminder for small business owners to exercise caution when selecting an accountant and would help to prevent fraud and financial loss.
Another important step is to take urgent action to clamp down on organizations and individuals who are cold calling small businesses and offering to reduce their tax bill using the research and development tax relief scheme. These small businesses are often being encouraged to make tenuous R&D claims and are misled into believing that the advice is coming from qualified, regulated organizations. Stronger regulations and enforcement are needed to stop these practices and protect small businesses from falling victim to fraud.
A further step that should be taken is to protect the term 'accountant' and restrict its use to only those who are members of a recognized professional body. A research by AAT shows that most people believe that this is already the case, and it would provide clarity for both accountants and consumers. It is supported by 82% of sitting MPs, and a phased implementation over several years would minimize disruption.
In addition, Companies House should require companies submitting their accounts to include the membership number of their accountant. This would allow for easy verification of an accountant's qualifications and would make it easier for small businesses to identify qualified professionals.
The need for better education for entrepreneurs and small businesses in finance was also raised as a concern at a recent meeting. Entrepreneurs often lack knowledge in financial matters and may not understand the importance of working with a qualified accountant, making them more susceptible to fraud. Additionally, many qualified accountants are nearing retirement age, which further highlights the pressing need for action on this issue.
In conclusion, there is a clear need for action to better inform the public and protect consumers from unregulated and unqualified accountants operating in the UK. By following the example of the British Bankers’ Association, taking urgent action to clamp down on fraudulent practices, protecting the term ‘accountant’, and requiring companies submitting their accounts to include the membership number of their accountant, we can work towards a more informed and safe environment for small businesses.
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