The future of accounting businesses has been put under the microscope by the Tax Office’s watchdog, and there are some major changes to business models in the pipeline.
“It is important to acknowledge that service models based on simple compliance activities will increasingly be substituted by technology — this is already well advanced in many jurisdictions,” the Inspector-General of Taxation said.
Client expectations, including from businesses, are also painting a picture of a business environment where one-stop shops are in high demand.
Central to this is convenience; businesses and individuals are less willing than they once were to attend an office or have several different advisers.
“For example, rather than requiring key clients to come into existing offices, making opportunities available to visit those businesses to understand and observe their operations and offering more tailored advice and services,” the IGT report said.
“When coupled with developments in cloud technology, real-time capture of transactional data through platforms such as the National Payments Platform and sophisticated machine learning capabilities to consolidate and analyse significant amounts of data, tax practitioners in the future are very likely to be able to expand their service offerings beyond current resource and geographical constraints,” the report said.
Business boom drives change
The gig economy is also motivating many of these predictions. Many businesses are now focused on small, nimble operations which cannot be tied to geography.
In fact, the gig economy has risen to such a point that Treasury is floating different tax reporting obligations for Australians with a side business.
“Realistically, this should have been in place a long time ago. The gig economy hasn’t gotten this big overnight. The question is why haven’t they done this earlier,” said the Institute of Public Accountants’ Tony Greco recently.
“There is low-level compliance in relation to the gig economy, and there are a lot of misconceptions — people adopt the mentality that ignorance is bliss and they don’t want to accept the tax consequences of some of their activities,” he said.
“The government can’t ignore this growing piece of the economy, and there are so many platforms out there that the size of the gig economy has gotten to the point where we are dealing with significant leakage in the tax system if you allow it to go along at these levels.”
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