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Accountants facing 'massive struggle due to VAT drop'

 
Accountancy News |  27/11/2008
Accountants facing 'massive struggle due to VAT...Accountancy firms could struggle to update their IT systems in the wake of the chancellor's decision to cut VAT rates this week.

The announcement by Alistair Darling to drop the rate from 17.5 per cent to 15 per cent could create a difficult situation for a number of firms, according to an expert from a provider of internal audit services.

In news which could affect accountancy recruitment, Ewen Ferguson, associate director at Protivi, has said that with VAT rates changing "infrequently", many firms have the 17.5 per cent rate "hard-coded" in their IT systems.

He added that checking and amending all systems could be a "massive and expensive task".

Mr Ferguson stated: "While the VAT reduction will be welcomed by many in the business community, for some organisations it will be a lot more difficult to implement than people initially think.

"Even just scoping the impact of the change could be tricky."

The 2008 Global Internal Audit Survey by Ernst & Young recently found the role of an internal auditor is changing in the current economic climate, with new specialist skills in IT and mergers and acquisitions needed.
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