Now that VAT has been officially introduced in the UAE, one sector set to benefit greatly – the accounting sector. Since the turn of the year, many firms have seized the opportunity to market their services, promising competitive rates for clients who need a learned and trusted business to manage their VAT.

SMEs have emerged as the dominant commercial demographic most in need of VAT advice, guidance and completion. This has driven accounting firms to offer tailored VAT packages to these clients. Along with receipt scanning OCR technology, accounting firms could be one the cusp of a dramatic boom in the months and years to come.

How Has VAT Changed the Accountancy Business?

Given that the UAE is unfamiliar with VAT, there has been an enormous swell of client enquires. This is, after all, the first time that VAT has been part of UAE commercial consumerism. Accountancy firms have found themselves helping an abundance of clients implement VAT and submit VAT forms every month.

The introduction of VAT has been especially prosperous for audit firms – and this trend looks set to continue in the coming months and years. However, it’s worth remembering that there will be a steady education process. A great many clients are unfamiliar with how VAT will be implemented, the final tally of exempt products and how they’re expected to pay VAT.

What is clear is that it has never been more prudent for clients to completely understand their finances and expenditure. For this reason, receipt capture, as a burgeoning sector, will also prove highly valuable to everyone.

Should SMEs Be Worried About VAT?

Simply put, no they shouldn’t be. Leading exponents of VAT have gone on record as saying that the way VAT works is quite simple. The only word of slight caution is that VAT is so new to the UAE, there will be an adjustment period.

The rate of VAT in GCC is 5%. This is highly favourable, especially when you consider that in the UK, for example, the VAT rate stands at 20%. In the USA, VAT is charged at state level rather than federal level and can rise to 16%.

However, just because SMEs shouldn’t be overall concerned with VAT, it doesn’t mean that they should take a lackadaisical approach to their finances. Receipt scanning OCR is essential to managing expenditure and should be an essential tool for any business in the UAE.

Is the Market Ultra-Competitive?

The short answer to whether accountancy firms are experience high levels of competition and convince clients that they are best-equipped to manage their VAT requirements is that they are, but level of service does vary.

Management consultants are beginning to offer VAT services to clients, something that heightens client competition. The problem with this is that, despite offering VAT services to clients cheaper that accountancy firms, management consultants are not auditors.

Like anything else, if clients want to enjoy a superior level of service, they need to reach out to the experts in the field. VAT penalties in GCC can be very high, so clients are taking a risk by not employing the services of an accountancy firm who has the required expertise to ensure that VAT is appropriately managed.

Technologies like a receipt capture API can drastically improve client’s chances of accurately recording their expenses and managing their VAT. In the future, it shouldn’t be overly ambitious to see this technology converge with accountancy – allowing for VAT and expense ease of calculation.