Accountex Manchester 2024: Act now on AI and MTD

Didn't get a chance to drop in to Accountex Manchester 2024 on Tuesday, 17 September?

Don't worry: we cover the key points to note in this blog.

The keynotes across 4 theatres saw a strong focus on personal brand and new client acquisition, perhaps manifesting a subtle change in the way accountants and bookkeepers view their profession.

Nonetheless, and as you might expect, tax matters and the burgeoning field of AI breakthroughs dominated many sessions. Accountants and bookkeepers must be aware of these, and act upon them swiftly and decisively.

This article looks at 3 main updates, first up is the latest from the AI keynote "AI is not the future".

Here's what we'll cover

AI is here, right now

It's been top of mind for professionals around the world.

As part of the keynote "AI is not the future; we'll show you how it's transforming the Accounting industry today", Sage CTO, Aaron Harris, said of the latest advancements in AI:

"Business accounting stands on the brink of a transformative era, driven by the rapid integration of Artificial Intelligence.

AI is poised to redefine the role of accountants even further, shifting from the traditional, numerical tasks, to becoming strategic advisors who drive business growth."

Aaron Harris, Sage CTO

He explained how a recent report from Sage and ACCA, along with the upcoming Sage Practice of Now report, has revealed a wave of optimism among accountants and bookkeepers regarding artificial intelligence in accounting.

An impressive 61% of respondents anticipate more opportunities than risks, and 68% feel assured about their ability to adapt.

Building on the previously mentioned research, Aaron projected the future AI landscape and its impact on accounting through to 2030:

• Increased creation of new roles and opportunities for accountants: AI will automate routine tasks, freeing up accountants to focus on strategic thinking and providing valuable business insights.
• The end of the monthly close: real-time data will replace the traditional monthly close, with 75% of SMBs transitioning to dynamic, continuous accounting practices. The transition hinges on the success of continuous assurance. As AI revolutionise risk management, real-time reconciliation and other assurance capabilities will become possible.
• Real-time data will fuel finance decisions: over 70% of SMBs will integrate real-time data into financial decisions, empowering them to drive growth and innovation helping them thrive in the competitive landscape of 2030.
• Ethical AI leadership will be priority: with 80% of SMBs having adopted robust AI ethics policy, by 2030 ethical AI will be non-negotiable. However, businesses won't just adopt ethical AI policies-they will become the leading force in ethical AI assurance.

Action points

Karen Ainley, SVP of Accountants for Sage, joined Aaron in the keynote discussion to explain how the business is working closely with customers to develop Sage Copilot, our new AI assistant tool.

This is done via the Accountants Early Adopter Programme for Sage Copilot, and signing-up today is highly advisable if you're eager to experience this groundbreaking technology firsthand and start the essential process of upskilling yourself and your team.

Ultimately, there are 3 imperatives for any accountant or bookkeeper, moving forward:

1. Get a position on the new AI

You need to understand what's on offer and how it will impact workflows.

Your clients are fascinated by AI, just like you are, and have the same challenges.

Can you answer their questions?

After all, you are the route to new accounting technology for most of your clients and always have been.

2. Trial the new AI yourself first

See how well the new AI works in your own business and on your own finances.

This allows for upskilling, too, letting you get ahead of the curve.

As mentioned, the Sage Copilot early access programme is ready and waiting.

Accountants and bookkeepers can sign up to the free plan for Sage for Accountants, and then add-in Copilot to the free Sage Accounting license you'll get as part of the package.

3. Start getting 24/7 fast flows of client data

Data is the oxygen of AI, and without it the AI tools will simply not be as effective.

Digitising clients is just no longer optional, especially in this age of Making Tax Digital, as we've already discussed.

Can you be sure your clients are providing the flow of data you require for an AI-powered future?

How can you make that happen?

Practice of Now

As already discussed, Sage used Accountex Manchester to tease some fascinating data points from its new Practice of Now report.

The Practice of Now is a global trends update for 2024 and 2025, showing how accountants and bookkeepers are navigating a changing world.

It looks at ways to embrace these shifts and unlock potential to become an accountant or bookkeeper of the future.

Here's just a small selection of the findings, ahead of its upcoming publication:

• 96% of accountants say the industry and their role will change in the next 5 years.
• 92% spend too much time on manual admin and compliance tasks, diverting their focus from strategic or advisory roles.
• 89% say integrating AI-powered tools or machine learning would make a real difference in improving their roles.
• 85% wish for more opportunities in advisory and strategic work.

Making Tax Digital for Income Tax

And finally, we're now less than 2 years away from the introduction of MTD for Income Tax for sole traders and landlords who have income of more than £50,000.

In his "An Update From HMRC" keynote, Jonathan Athow, director general of customer strategy and tax design, discussed the organisation's "digital first" approach that is manifested in the imminent arrival of MTD for Income Tax.

"We want to make it easy to get tax right and hard to get it wrong, and that links through to our digital journey," he said.

He reiterated HMRC's belief that there will be free software available for Making Tax Digital for Income Tax, but added it would only be for those with "the simplest affairs".

"We have a commitment that will we have some sort of free software. But I don't want to give a sense that there's going to be free software for everybody […] We are asking people to invest in software."

He said he expected bridging software-usually plugins for Microsoft Excel to allow MTD submission-to be available as part of a "rich and vibrant" software offering, but added caveats.

"We want to make it as easy as possible for people to get into the system.

For some people it'll be the right solution but whether it'll be the long-term solution for everyone, I don't know."

There's been a lot of uncertainty around MTD for Income Tax, including its introduction date and specifics of how it works.

Both have been adjusted several times in recent years.

Athow said that there's no reason why HMRC will not hit the April 2026 deadline but warned that it was a "large and complex programme".

"What we would do if we had problems is we would probably take out particular groups," he added. "If nothing goes wrong with our IT build, we will deliver for April 2026."

He further explained how, since April 2024, HMRC have been inviting sole traders and landlords to voluntarily sign-up, adding: "That is working. We've got people doing quarterly updates. So, we know the technology works."

Signing-up early makes a lot of sense and gives accountants a chance to test drive the new requirements and work out any bugs ahead of legal mandation, when penalties will also apply should errors creep in.

Other discussion points Athow mentioned include:

• There will be no specific exemptions for pensioners, outside of existing ones around disabilities.
• There was no mention of a soft-landing period, as with Making Tax Digital for VAT, with Athow explaining: "The moment you move onto MTD [for Income Tax], you move into the penalty version." This is the points-based system already established for VAT.
• The upcoming multiple agents authorisation system should mean agents can access more client data, but while a separate stream of work is ongoing around allowing agents more insight and abilities, that is not part of MTD-so agents will remain fundamentally limited for the moment.

The key requirements of Making Tax Digital for Income Tax are summarised in our guide here.

Action points

There's little doubt that Making Tax Digital for Income Tax needs to be taken seriously by accountants and bookkeepers. Here's some suggested ways to get started:

1. Start testing MTD for Income Tax with clients

A full tax cycle is 22 months, from its start through to latest possible payment date.

So, it's already too late to test a full MTD for Income Tax cycle with a client before it's mandatory in April 2026.

But as they say, the best time for action was yesterday but the second-best time is today.

You and your clients have been able to voluntarily sign-up to MTD for Income Tax since April this year. If you haven't already, you can start today.

2. Start segmenting your client list

Key to surviving MTD's introduction for VAT back in 2019 was understanding how clients felt about technology.

Use that experience for MTD for Income Tax planning and start segmenting your client list so you can calculate the workload required to assist clients.

For instance, some clients will be tech savvy and welcome MTD for Income Tax without a second thought.

They will require hardly any input from you.

Many others will be comfortable with technology, and already be using digital ledgers, but are not experts. They will require education, at least.

And finally, there will be a sizeable proportion to whom accounting and the technology involved are abhorrent.

These are the clients who will require most work, and therefore should be prioritised well ahead of April 2026 (if they have incomes over £50,000).

3. It's time to educate

As with MTD for VAT, HMRC are rather cheekily relying on accountants and bookkeepers to do most of the legwork of client communications around MTD for Income Tax.

And we can again learn a lot from experiences of MTD for VAT. Email blasts, webinars, social networking posts, in-person events above pubs combined with business networking…all are at your disposal.

So too, is simply tacking on a discussion of MTD for Income Tax to any client conversations.

Adding a mention to your email signature can also trigger more discussion with clients.

Final thoughts

It was a bustling Accountex Manchester this year, with plenty of insight into hot topics like AI and MTD for Income Tax providing some real-world insight and useful preparation points for the year to come.

For more updates on the latest news in accounting, check back regularly.

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