Reflections on 2017 by the ICAS Executive Team

Reflections of London
By The ICAS Executive Team

20 December 2017

The ICAS executive team made several predictions for 2017, but how true did they hold for the finance and accountancy profession?

Mark Allison, Executive Director, Education

The apprenticeship levy became a ‘stealth’ tax on large businesses and organisations on 1 April 2017, as predicted. Many employers were unprepared for this, and even more did not appreciate the differences between England and the approach in Scotland, Wales, and Northern Ireland.

With few approved apprenticeship schemes operating during 2017, there was limited opportunity for recovery of the levy and employers now have an eye on the calendar to claim back 2017 levy fees in 2018. The number of young people entering apprenticeships in England fell dramatically in the first year of the scheme.

The Accountancy sector managed to gain approval of its trailblazer model and funding band in November 2017 and so employers in England can start to recover against aspects of CA training in 2018. Skills Development Scotland and ICAS are having encouraging conversations from a Scottish perspective in this same space.

The march of the robots into the role of accountants and auditors continues, but before we are completely overrun, there will be a new type of employee, potentially replacing traditional recruits, with far deeper skills and knowledge in AI, analytics and data interrogation.

The CA qualification maintained its standards and recognition in 2017 and to a large extent, therefore, the 2017 predictions all came to pass.

Michelle Mullen, Executive Director, Professional Standards

In 2017, we said all firms and businesses would need to review their approach to AML, and indeed there was a brand new set of regulations transposed in June 2017, with a new oversight regulator (OPBAS) being established on 1 Jan 2018. This will continue to be a focus for 2018.

My 2017 prediction on Brexit did come true, in that planning for the transposition of regulations into UK law is underway. The great repeal bill and all the legislation is, in essence, saying the status quo applies and the UK will incorporate EU legislation, and then remove the bits we don’t want.

David Wood, Senior Policy Director

As I predicted at the turn of the year, the Brexit process has been slow and hugely frustrating. Getting the necessary withdrawal legislation through parliament is clearly going to be fraught with difficulty, and indeed, negotiation with the EU stops and starts. Furthermore, the need for transitional arrangements for a post-Brexit period is now openly discussed.

ICAS published an excellent expert report in late 2017 on the extent to which the Canadian CETA could provide a basis for an EU-UK trade agreement – which should be of great assistance when trade talks finally commence.

I speculated as to whether US President Trump would be able to pursue some of the policies he had been espousing, and appointments to the Securities and Exchange Commission (SEC) and Public Company Accounting Oversight Board (PCAOB) proceeded slowly. There appears to have been little progress towards any greater use in the US of international standards for accounting or for audit.

As many of us hoped, and as ICAS had persistently lobbied for, HMRC amended its plans for the implementation of its Making Tax Digital (MTD) proposals. HMRC heeded the warnings of how burdensome the proposals would be for the majority of businesses over the planned implementation timeframe – and a more feasible timeframe has now been adopted.

My last comment had been about some of the more fundamental issues which had been bubbling along e.g. underinvested UK Infrastructure and a growing ageing population.

The restraining of Government borrowing and the additional cost of civil servants to see us through and beyond Brexit, I speculated that this was likely to push us towards a higher tax environment for businesses and individuals alike. I think 2017 has further highlighted the nature of some of these issues but no politicians have yet dared to suggest to the electorate that higher tax may be needed to “make ends meet”.

Topics

  • CA life
  • Accountancy
  • Opinion

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