Tyrrell and Company is an accountancy firm based in Cambridge. Having worked for Her Majesty’s revenue and Customs and a top four accountancy firm, Craig Tyrrell started out 20 years ago as a sole trader before founding the company in 1994. Tyrrell and Company is now an established, mid-sized firm of award winning consultants advising small and medium-sized enterprises on accounting, tax and financial matters.
I place technology, and the cost/time savings it brings, at the heart of my business and its strategy. The use of automated accounting software, such as Xero, is particularly important for us, enabling the auto-population of accounting records. As a firm, we have been able to adapt quickly in a market that is ostensibly resistant to change. Having embraced effective uses of technology, we have been able to work effectively, improve the quality of our work and respond rapidly to innovations within our sector. This has been acknowledged by our peers, resulting in Tyrrell and Company being awarded Accounting Partner of the Year (england/east) by Xero, adding to our previous 20/20 innovation awards.
The advent of cloud accounting and making tax digital (MTD) has changed the face of accountancy. It has transformed the accountancy sector from a compliance driven reactionary services to proactive “business advisory” services. This is an area that Tyrrell and Company has excelled in recently. As early adopters of cloud accounting technology, not only has our business transformed, but the client experience has changed. The increase of technology in the sector to deal with “grind work” has significantly reduced the amount of time spent on compliance. As a result, our resources can be used more effectively, providing clients with sound business and strategy advice.
With our commitment to embrace technology, staff motivation/retention levels have increased substantially. With less mundane tasks and more interaction with their clients, the assistance that they give is more concentrated. This has also helped to improve our customer experience, with a 96 per cent approval rating from over 550 reviews.
Having developed our own product, Xero Trifecta, by using the best of breed cloud accounting products, we have helped to automate control, cashflow and time, enabling clients to improve upon or turn around the fortunes of their business.
Although not without its issues, such as “staff buy-in” and 100 per cent commitment, since embracing the world of cloud accounting we have personally seen year-on-year growth. This new technologically-oriented strategy increases sales and develops new products, whilst responding quickly to sector-specific innovations. Moreover, it improves the skills of our workforce, increases costs, reduces efficiency, streamlines our internal administrative procedure, reduces compliance and improves relationships.
Alongside new technologies, we have made a conscious effort to maintain the highest technical and moral standards in tax compliance and advisory work. We are scrupulous in problem-solving and diligently file for clients, based on full disclosure. We reject “too good to be true” tax avoidance structures and schemes, generally promoted by tax boutiques, which have proved almost entirely ineffective. This approach has shaped the culture of our organisation, and had knock on benefits to both our company and clients.
Challenges and the future for Tyrrell and Company
Charging clients for compliance and other routine functions will continue to be difficult. In this regard, costs must be reduced. As mentioned above, automation of routine functions using technology is the way forward. The key growth area will then be the offering of advice through a deep understanding of the clients’ businesses. From our own experience, they are more than happy to pay for this service, which is viewed as beneficial.
Credit where credit is due. Thanks to changes in the legislation, but more importantly the attitudes of the Courts to existing legislation, together with aggressive media coverage, most of our clients no longer need dissuading from aggressive tax avoidance strategies.
The appetite for such strategies has all but disappeared. We still see far too much low level “non-compliance”, however, such as non-notification of tax liabilities, and too much time wasted on complicated judgement areas.
HMrC is far too stretched and arguably lack the expertise and technology tools required to deal with SMes. We are aware of other small firms advising clients to adopt a “heads down, don’t tell” strategy. Better, automated, data capture and analytics could improve the identification of offenders.
A Vision for the future
Digitisation of taxes, if embraced, would positively reform the UK tax system. This could also transform how small businesses operate. Subjectivity also needs to be removed from the process as far as possible, leaving the human decision-making process to focus on business relevant choices. examples include the artificial distinctions between earnings, dividends and capital proceeds for small businesses. Another example includes the minimal differences between employed, self-employed, and engaged workers, all of whom should be treated and taxed similarly. Another example includes business profits taxed within sole trader/partnerships compared to those within corporates. Merely playing with tax rates leads to a rush to incorporate, often followed by a rush to dis-incorporate. A radical new approach is required, such as automatic presumption of transparency.
Removing these distinctions, or making the distinctions automatic (and therefore not subject to human subjective judgement), would greatly reduce time spent and errors made. Many more functions would subsequently be automated, ensuring that Tyrrell and Co, with our focus on technology, will be well placed to deliver.
Further work is required to ensure that human interaction is reduced even further from the process of preparing and submitting accounting and tax filings.
If more complex layers of legislation are laid on top of existing complex legislation, we will continue to operate in a market place where advisors, ignorant of the rules, are rewarded because they make things seem simpler. Their clients love both the simplicity and the methods of minimising tax that appear to work, due to the fact that they are not scrutinised.
If advisors who have a detailed knowledge of the law continue spending disproportionate amounts of time grappling with labyrinthine rules, artificial distinctions and fiscally driven choices, instead of on the success of their clients’ businesses, a category we find ourselves in will continue emerging as the go-to solution.
See Tyrrell & Company in the Accountancy and Financial Services edition on page 21: