Reflecting on 2020 and looking ahead to 2021
Working closely with our members, government, and the wider industry, the IFA has had a uniquely frontline view of the highs and lows of 2020, a year that will always be remembered for pandemic transformation, says IFA CEO John Edwards.
While at the time, the focus of many will have been on the challenges of COVID, I feel a broader look and a bit of introspection reveals many positives to 2020, setting us up for an interesting, challenging, but overall encouraging 2021.
Many of you have been challenged to take on a significant level of change in a very short period of time, working to understand and execute the myriad government support schemes, and the subsequent developments. Add to this the pressure of HMRC investigating fraud across the schemes and accountants have been placed at the forefront in ways that they are not normally. In response, we have seen accountants rise to the challenges of keeping their own practices going, and also supporting clients to the very best of their ability. Often this has meant helping clients to keep operating and potentially even fundamentally overhaul their business culture and working practices.
Naturally, despite these successes, there has been significantly increased personal pressures and we have seen endless examples of our members burning the midnight oil while other sectors and workforces are furloughed. Not all have escaped unscathed, and there has been significant impact on the health and wellbeing of the people in our sector, something which we are keen to see improve in 2021. COVID-19 and the ensuing safety measures arguably compounded an already volatile global environment, however, my overarching experience of 2020 is that during this difficult and damaging time, we are a sector that has shown overwhelming resilience, grit and determination, traits of which we should be very proud.
In our reflections, we must not forget the leaps forward we have made as a sector either. We’ve seen accountants fulfilling the important role of trusted business adviser, providing much needed advice and direction, helping with immediate business survival and future proofing of SMEs, as well as some huge successes in terms of advising and supporting innovative business model adoption, diversification, and eCommerce that businesses would never have had the confidence to try before. Accountants have been pivotal in providing advice and should be exceedingly proud of their contribution to a changing business landscape.
What’s more, there has also been an acceleration in digital adoption for SMEs, as well as accountancy practices such as Making Tax Digital, cloud-based accounting systems, and virtual conferencing software being adopted. All of these have seen transformative growth, which is not only benefiting the sector, but also giving accountants access to better, more real-time information about your clients’ businesses supporting your ability to analyse, review, and advise clients much more effectively.
We too as an organisation have had a positive year on behalf of our members. We have submitted four consultation representations to government and secured some great sector wins, including a much-improved customer charter from HMRC. Our focus has and will continue to be on supporting our members, member firms and students, even more so during this difficult period, whilst recognising the need to continue to operate within the regulatory framework and simultaneously raising the Institute’s profile, recognition and global growth as well as providing greater efficiency, greater effectiveness and greater member value. Our positive financial position during this period can be attributed to maintaining business as usual but at the same time future proofing the Institute by reviewing the way we work and making the necessary adjustments to budgets and cashflow forecasts.
Work has continued over this period to develop the foundations to deliver global growth and compliance over the next decade, including:
- review and development of back office systems, processes and procedures focusing on more online solutions and services;
- clear focus on global membership and student growth;
- providing greater member value through services provided, including member support group, a COVID-19 resource hub, online blended CPD, workshops, branch meetings, “Financial Accountant” magazine and our weekly e-newsletter;
- managing performance and expenditure;
- meeting our obligations as an AML supervisory body as well as a trainer, regulator, and provider of continuing professional development to responsible professional accountants.
The Money Laundering Regulations 2019 places new obligations and demands on member firms and the IFA as a supervisory body. In the area of regulation, our approach has been very much around education in the hope that enforcement becomes less necessary. Ensuring members remain up-to-date with changes in legislation and regulations is a responsibility we take extremely seriously. Work has taken place to further develop our regulatory compliance and monitoring processes with the introduction of a Regulatory Committee and the recruitment of both temporary and permanent resources to conduct approximately over 2,000+ member-firm annual returns, risk assessments and monitoring visits to member firms. We will now be taking a much harder, more robust stance where members fail or refuse to meet their regulatory obligations and/or the IFA Bye-laws and regulations.
Our aim is to continue to grow, enhance our reputation in the professional and business community as well as with government, and to maintain the IFA’s positive financial position. We have clear and defined strategies designed to grow membership and students, raise brand awareness and the quality and standards of members.
It is of course difficult to predict when we will be able to move fully beyond COVID and whether the vaccines will aid recovery swiftly for 2021, but hopefully there will be fewer surprises in the coming year. Instead, this should permit you to turn your attention to the other important changes and deadlines which are looming, from Making Tax Digital Phase 2, to IR35, VAT reverse charges, and of course the EU transition in whatever form this might take. As a professional body, we will seek to support our members in every way we can and will continue to fulfil our role of providing unbiased, factual advice that can be relied on to support business and clients. Personally, I believe that the UK has bounce back in its DNA and while there is doom and gloom around a potential recession, I am optimistic that we will see an overall positive outlook, if we work at it.
John Edwards, chief executive, Institute of Financial Accountants