Monday, 17 March 2014

Three big tax issues to watch out for in 2014

Three big tax issues to watch out for in 2014
The tax industry is always changing, with new legislation constantly on the cards. Find out what the big issues will be for 2014.

As long as there is government, there will be taxation. Yet despite this constancy, the tax industry is constantly changing. It will be no different in 2014 as government-led tax reform and shifts in the industry make their mark.

1. Government tax reform

The new Coalition government will be looking to make its mark this year following six years of a Labor government. Expect a number of their tax reform policies to be introduced into parliament, including the big one: scrapping the Carbon Tax.

The Carbon Tax is Prime Minister Tony Abbott’s number-one tax-related target, although there are a number of other initiatives on the table, including reducing company tax and introducing a paid maternity leave scheme. If any of these come through, there will be complex tax implications for businesses, so it will be a big year for business tax advisors.

2. Digital disruption

New, easier-to-use software will help businesses automate some tax-compliance work, but on the flipside this will reduce the form-filling role of some tax accountants so they can concentrate on adding business value. Low-value compliance services will see margins shrink as a result, and tax professionals will see a shift to high-value accounting and advisory roles. Tax professionals whose main bread and butter are audit and/or compliance services will therefore need to step up their skills and expertise.

3. Diversification of the industry

The accounting sector has been in turmoil for the past year as poor economic conditions have caused accounting clients to pull back on spend. The big winner from this is diversification. Firms that offer tax and business advisory services are, in opposition to trend, thriving. According to BRW, “tax advisory and business advisory remained the fastest-growing areas… and tax compliance and business advisory were the biggest fee contributors.”

For graduates and undergraduates, this will mean those with a diverse knowledge area will fare well in the new environment with business and communication skills at the top of the list.

The tax industry is changing. A new government will ensure reform is on the agenda this year, but the evolution of the industry itself will also see a shift towards specialist skills with tax professionals taking on higher-level advisory roles due to digital disruption and the changing needs of business.

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