This has broadened access to markets, talent, capital and innovation and growth opportunities for small businesses. Easing of international borders means skills have become more transferable, opening doors for accountants to work and recruit from both countries.
The first trade deal since Brexit could transform the role of accountants from number crunchers to business advisors to help navigate the complexities expanding into international jurisdictions.
A financial services firm can play a critical role by supporting small businesses to navigate the complex financial and regulatory landscape created by the FTA, giving the accounting profession opportunities for growth and innovation, according to the UK Department of International Trade. The Australian Trade and Investment Commission (Austrade) supports accounting firms looking to expand internationally with market entry assistance and networking to connect Australian accountants with potential UK partners.
William Bain, Head of Trade Policy at the British Chamber of Commerce, says early signs show it has already helped the export market. “Some companies have definitely benefitted from tariff free trade and customs facilitations to export goods to new Australian customers,” he says.
However, he says the mobility arrangements that came into force later have yet to be captured in any data to understand the impact. These are designed to provide flexibility for employers to hire younger staff from the other country for up to three years for people up to the age of 35.
“This is one of the most open youth mobility schemes of its type, globally,” Bain says. “There are also further sectoral arrangements which should build upon this for young professionals in both countries.”
Regulatory, cultural and technology differences create challenges and opportunities
Though the long-term impact is likely to be positive, fostering innovation and knowledge exchange in the accounting sector, the arrangement is not without its challenges. Differing regulatory environments, tax systems and unfamiliar business cultures must be navigated. And there are differing communication styles to overcome. What may be regarded as direct in Australia may be interpreted as abrupt in the UK. Investing in staff training and compliance and integration of potentially incompatible systems and processes could help smooth the transition.
The FTA is an opportunity to bring fresh ideas, new innovations and diversity of thought, strategy and systems to each jurisdiction. And it has widened the talent pool for firms struggling with critical gaps in skills.
UK firms are finding a market for their expertise in international tax planning, fintech and international finance. Australian accountants are leveraging their knowledge of Asia-Pacific markets to help British companies looking to expand beyond Australia.
The FTA has streamlined visa processes and reduced barriers to entry to help accountants qualified in one country have their credentials recognised in the other. Outsourcing opportunities have been expanded, along with the ability to sell accounting software and technology and training and education across both countries.
And it has paved the way for a more seamless opportunity to develop satellite offices and work in Australia.
Innes Willox, Chief Executive of AiGroup (Australian Industry Group), which together with its partner organisations represents the interests of more than 60,000 small and large businesses, says the process for its members has so far been seamless.
“Members tell us that accessing the benefits of the UK FTA has been straightforward and seamless, as you would expect from an advanced economy,” he says.
But the reality of distance has its drawbacks. “However, proximity is always a key success factor in trading relationships and no FTA can combat 40 days shipping,” Willox says. “Additionally Brexit has meant that the UK is no longer the natural location for Australian companies looking for a beachhead in Europe.”
The FTA coincides with the AUKUS agreement between the UK, Australia and the United States to deliver nuclear-powered submarines to Australia, creating partnership opportunities in many related industries, according to Willox.
“The FTA has tipped the scales to keep the UK on the radar for Australian companies looking for a reliable partner in a range of sectors including defence, particularly in light of the AUKUS deal, technology and advanced manufacturing,” he says.
FTA boosts trading volumes
The FTA removed tariffs on about 99% of the goods Australia exports to the UK around agriculture, automotive and manufacturing products. This will help winemakers, farmers, fishers and other small businesses lower their costs and increase their competitiveness in both markets.
Australia is the UK’s 21st largest trading partner, with bilateral trade equating to £20 billion (A$37.91 billion) in the 12 months to the end of Q4 2023, according to the UK’s Department of Business and Trade.
The UK was Australia’s 11th biggest trading partner in 2023, the relationship generating a 16.4% increase in value compared to the previous corresponding period.
Total trade in goods between Australia and the UK totalled £6.7 billion or A$12.7 billion between June 2023 and April 2024. These trade flows are expected to grow as the benefits flow through both economies.