1. Making Tax Digital
Despite the April 2026 start date, the lead up to Making Tax Digital for Income Tax Self Assessment represents an ideal time to prepare ahead of time. Pinkney cautions against complacency, warning accountants and businesses might find themselves caught unawares if they delay their planning too long. Some practitioners may expect further delays given the flurry of previous postponements. However, Pinkney advises against this assumption, cautioning that it was unlikely to be postponed again.
Response: Pinkney says HMRC is looking for early MTD adopters to test the system. “Our advice is to engage now and get ahead of the game,” he says. “If you’re able to engage with HMRC, be an early adopter for some of your clients and get them up to speed, and then you’re well placed within the market. You’ve already got someone looking at your systems and you’re getting support that you otherwise wouldn’t get.”
To ensure readiness, accountants should consider participating in HMRC’s MTD ITSA beta programme to stay informed and ensure your practice meets the new requirements effectively. Choosing the right software is critical, with HMRC maintaining a list of options that are MTD compliant. Pinkney advises companies to use accounting software that can easily send updates to HMRC and plan for a smooth transition to the new system and compliance requirements.
2. Economic pressures and financial management
Following recent Autumn Budget changes, 2025 brings intensified focus on profitability and cash flow management. The rise in minimum wage, changes to business rate reliefs and an increase in employer National Insurance contributions from 13.8% to 15% have lifted employment costs. Pinkney says businesses gained valuable insights from the challenges posed by the pandemic to help them navigate a challenging year ahead.
Response: Effective cash flow management and proactive handling of bad debt are essential. Accountants play an important advisory role in helping clients navigate economic uncertainties while setting up for sustainable growth. Pinkney advises accountants to understand their clients’ business in detail and how they may be impacted by the US tariffs. Financial modelling and scenario analysis help test a client’s financial resilience to the economic ructions. “Early discussions with clients to see how resilient they are and how these issues can hugely affect the bottom line is paramount,” he says.
3. Technological adoption
As artificial intelligence (AI) continues to transform accounting processes, a measured approach that brings on board technology to enhance processes rather than leaping on to fads will support business growth. Pinkney warns that technology isn’t a one-size-fits-all solution and that tailored adoption strategies can address specific business requirements.
Response: When evaluating new technologies, Pinkney advises asking whether it improves the customer experience and operational efficiency to ensure any investment delivers solid returns.
The human element remains irreplaceable. Tools that accelerate efficiencies cannot replace the trust accountants must still build with their clients while maintaining strong ethical standards. “Be pedantic about finding the right tools and what works to enhance services,” he says.
4. Skills gap and talent acquisition
The evolving nature of accountancy is creating significant skills gaps within the profession. According to recent industry surveys, over 70% of UK accounting firms report difficulty recruiting talent with combined financial expertise and digital literacy.
This talent shortage is expected to intensify throughout 2025, with practices competing for professionals who understand both traditional accounting principles and emerging technologies. Forward-thinking firms are responding by developing comprehensive training programmes and creating more flexible working arrangements to attract and retain top talent.
Response: Invest in upskilling existing staff to address the skills gap. “As businesses are tightening their purse strings with additional costs, it’s easy for training budgets to get hit,” Pinkney says. “IFA training programmes are accessible and can be completed over time.”
5. Advisory services growth
As compliance work becomes increasingly automated, UK accountants are rapidly expanding their advisory services. This trend is expected to accelerate in 2025-26, with high-value consultancy becoming the primary revenue source for many practices.
“As businesses are tightening their purse strings with additional costs, it’s easy for training budgets to get hit. IFA training programmes are accessible and can be completed over time.”
Tim Pinkney, Director of Professional Standards, IFA
Response: Specialised advice in areas such as business restructuring, international expansion, and financial technology implementation is particularly in demand. Accountants who position themselves as strategic business partners rather than compliance specialists will likely see the strongest growth in the coming year.
Pinkney says artificial intelligence (AI) can mop up some compliance work and free up accountants to focus on being trusted business advisers. “Accountants that understand client business models will thrive,” he says. “With compliance, you’ve still got to get fundamentals right, but there needs to be a shift for successful firms to thrive.”
6. Cybersecurity and data protection
With financial data increasingly stored in cloud environments and shared across multiple platforms, cybersecurity has become a critical concern for accountancy practices. The financial year 2025-26 will bring heightened focus on data protection as regulatory scrutiny intensifies and cyber threats grow more sophisticated. Recently, some accountants unwittingly clicked a link on a fake HMRC email about AML supervision that contained inaccuracies.
Response: Industry analysts predict that accountants will need to invest significantly in cybersecurity infrastructure and staff training. Many firms are expected to appoint dedicated information security officers and implement robust data protection protocols to safeguard sensitive client information.“This is an area that is under-valued,” Pinkney says. “Make sure your systems are up to date and secure.” In the face of unsolicited emails, Pinkney advises people to “stop, think and be vigilant – it will save a lot of problems”.
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