Moira McMillan, Chiene + Tait Tax Director, writes about how to plan for the future in turbulent times.
When the news is dominated by turbulent events, it becomes harder to plan for the future.
I remember writing an article for Connect newsletter just before the Scottish independence referendum in September 2014 which mentioned the famous Donald Rumsfeld quote about the known knowns, the known unknowns and the unknown unknowns. With the ongoing political uncertainties, I could have called on this again but I have turned instead to a quote that is said to be an ancient Chinese curse. ‘May you live in interesting times’ somehow seems appropriate.
Brexit remains the key issue tripping off many a tongue. The snap General Election has failed to provide clarity on anything much, so we know that it will be some time before the Brexit process is complete – and, indeed, whether the UK will remain in the single market, the Customs Union, the European Court of Justice or myriad other Europe-wide institutions. This provides uncertainty for many: for businesses, which will find themselves in a different situation once the UK has left the Single Market, and for individuals, who may find themselves affected by new, harder borders.
Meanwhile, the possibility of another independence referendum seems to have diminished for now but it remains the policy of Scotland’s largest political party and we cannot rule anything out in these days of interest: who would have thought a year ago that Donald Trump would be President of the USA?
There are interesting times ahead too for the accountancy profession with the Government’s ‘Making Tax Digital’ (MTD) programme looming on the horizon (see pg 10 of our Summer 2017 Connect newsletter). This will radically and permanently change the way tax submissions are made to HMRC and will be the biggest change to the tax system since the introduction of Self-Assessment. Certain elements of MTD have been delayed but VAT compliance in 2018 is still necessary, and HMRC is pressing ahead with a bigger roll-out in subsequent years. This is despite ‘glitches’ in the HMRC software for the 2016/17 tax returns which will mean that some individuals will be forced to file paper returns this year. A cynic might wonder if the HMRC systems will be robust enough to cope with MTD.
Technological developments are an unavoidable feature of this interesting age. New systems and processes bring amazing benefits but also new challenges. The NHS, in common with many other organisations worldwide, recently suffered a phishing attack – basically, a criminal implanting a virus on their computers in an attempt to extort money or gather sellable data (see pg 5 of our Summer 2017 Connect newsletter). This sort of attack is ever more common, and will become increasingly difficult for organisations to prevent. Meanwhile, British Airways had a catastrophic collapse of its IT systems over one weekend that cost the company tens of millions of pounds. The new EU data protection legislation, the General Data Protection Regulations, or GDPR – to which the UK will still be subject when it is launched in May 2018 (see pg 8 of our Summer 2017 Connect newsletter) – is doubtless intended to add a layer of protection but it also adds a burden to businesses to ensure that they comply.
The way we shop and the way we travel has already been changed thanks to technology. What will be next? Driverless cars could threaten professional drivers – of taxis, lorries, delivery vans, buses – within 10 years. Even human interaction can be replaced by technology, so we can’t rely on the common fall-back defence that customers prefer face-to face service: Amazon’s size and growth shows that this isn’t always the case. It’s a big question: in 10, 20, 30 years, what jobs will have been automated?
What can you do?
The framework of the world will continue to be shaped by politicians and tech entrepreneurs. There will continue to be unpredictable events, uncertainties, debates, annoyances and hold-ups. The world will also continue to turn. The only battle you can’t win is the one against change. Fighting against change is a waste of energy: the best you can do is to understand change, help make it better, and have a plan.
The sensible course of action is to take control of your own destiny, as far as possible. It’s impossible to mitigate every risk but it’s sensible to take care. Making sure you have IT protection to ward off fraudsters is a good practical example; other problems might require more careful, thoughtful and tailored planning to address – ensuring flexibility in your skills as job roles are re-defined, for instance, is a longer and trickier project.
At Chiene + Tait we believe that our clients see us as their trusted advisers who can be relied upon to provide the right advice in turbulent times. We believe that we have the expertise across our various sectors to ensure that we can continue in this role during the interesting times ahead.