Mercia 2025 Predictions
This festive season, we’re counting down to Christmas by sharing our team's insights and predictions into the future of accountancy. Over the next 25 days, we’ll reveal one prediction each day about what 2025 could hold for our industry.
From groundbreaking technologies and regulatory shifts to evolving client expectations, these forecasts represent what we believe will shape the accounting landscape in the year ahead.
Join us as we unwrap our vision for the future, spark conversations, and help you get ready for the opportunities and challenges 2025 will bring.
Preparing for economic shifts and compliance challenges
Brendan Howard
Managing Director Ireland
They always say when the US sneezes, Europe catches a cold. I suspect the economic impact of the US election may not fully reach our shores in 2025, but you never know in these uncertain times.
Definite changes coming down the tracks are ESG reporting (Environmental, Social and Governance), Sustainability Reporting and the impact of AI on economic life. Some firms may feel these not to be relevant to their clients, and they may be shocked to discover when they are proven wrong.
Outside of that it’s the 'bread and butter' matters of ever increasing compliance requirements and the need to train partners and staff to stay ahead of it.
That’s where Mercia can help your firm in identifying weaknesses and assisting with remedial action.
Leadership support for thriving teams in 2025
Louise Conner
Management and Skills Trainer
During 2025 I predict that the support needed for managers and teams will continue to be how to understand each other and get the best out of working relationships.
Generational differences and a varying approach to work can contribute to the struggles of management and leadership.
Acquiring the skills and tools to navigate these challenges with support on situational leadership, understanding team roles and change management will greatly enhance our leadership skills and make our working environment one that we can all thrive in.
Anticipating changes to NIC, APR, and MTD implementation
Mark Morton
Technical Lecturer and Consultant
Having listened to and considered the measures arising from the Autumn Budget, I have two main predictions for 2025.
The first is that the government will concede ground on some of the major Budget announcements, particularly the increase in Employers’ National Insurance Contributions (NICs) and the ‘capping’ of APR.
The second is that Making Tax Digital (MTD) will be deferred again from its current start date of 2026.
Stay informed with our Finance Act and Tax Update courses throughout 2025, available face-to-face at a venue near you!
VAT changes ahead: what can the food sector expect?
James Hurst
Technical Lecturer and Consultant
In March 2024 who would have predicted an increase to the VAT registration threshold? Especially as the then-Chancellor had said only four months earlier it would remain unchanged until April 2026.
But VAT has a reputation for frequent changes, especially from new Tribunal decisions. One area where I feel confident of something new is the perennial topic of VAT food cases. Ever since the legendary Jaffa Cake decision (a cake or chocolate covered biscuit?) we have enjoyed new decisions on food products every year.
Essential sector updates expected in 2025
Georgia Robertson
Events and Course Operations Senior Manager
With so many changes and updates coming from the Budget I expect further updates in individual sectors that our clients will need to know about which will be covered in our 2025 conference, starting with the International Tax Conference.
The launch of our Festival of CPD event was extremely successful this year so expect this to be the case in 2025 - bigger and better!
Sustainability and technology take centre stage
Jo Gregory
A&A and Compliance Senior Manager
In 2024, the two main topics were sustainability and technology and I see these as being key in 2025.
In respect of sustainability, firms should understand that sustainability reporting and assurance will affect all businesses (large and small).
In respect of technology, firms will need to recognise and embrace the opportunities (of which there are many), but also address the risks and limitations.
I see 2025 as an exciting year for us all!
Cleaning up corporate structures
Aamar Hussain
Technical Consultant/Author
2025 will come with a greater focus of transparency and clarity in corporate reporting in the UK, encouraging groups to ‘clean up’ their corporate structure with an increase in group reorganisation exercises.
Mercia Group offers a technical advice service which aims to provide expert technical advice on a wide range of audit, accountancy and related legislative matters, including dealing with group reorganisations.
Sustainability at the forefront: growth opportunities
Emily Ellison
Technical Services Director
During 2025, small and medium-sized accountancy practices are likely to see a growth in demand for ESG (Environmental, Social and Governance) reporting and advisory services. Clients will increasingly seek guidance on sustainable practices, driven by regulatory changes and stakeholder expectations.
Accountancy firms will adapt by integrating advanced technologies for efficient ESG data collection and analysis. This shift will necessitate upskilling staff and expanding service portfolios, positioning these firms as key players in promoting corporate sustainability.
Rising Employment Costs in 2025: Small Businesses Brace for Impact
Helen Knight
Tax Senior Manager
Employment costs for many businesses will rise in 2025 with the increase to employers' National Insurance, the National Minimum Wage and the National Living Wage albeit some costs may potentially be offset by the increasing employment allowance.
We'll be keeping a watchful eye on the impacts, particularly on small businesses and it will be interesting to see whether any further support is provided to this sector.
New government, new opportunities: tax planning for 2025
Kay Sanders
Product Manager - Training
With a new government in place and key changes anticipated over the coming tax years, it will be more important than ever to keep abreast of planning opportunities for clients before the end of each tax year.
Mercia’s Year End Tax Planning Guide can help you make your clients aware of the issues and enable them to identify areas where planning might be relevant to them.
2025 Is the Year of AI - Are You Ready?
Pete McGrath
Head of Marketing
ChatGPT has just celebrated its second birthday, within two months of launch, over 100 million users signed up - myself included! Like many, I thought, wow, this is incredible but I didn’t fully embrace it.
Things have changed. Generative AI is a regular part of my marketing toolkit, but like many, I’ve yet to unlock its full potential.
Whatever your role, AI will elevate you and your work in 2025. If you’ve not embraced it yet, it’s not too late - but don’t wait too long, or you risk being left behind.
Mercia clients can get started with our courses led by Daniel Clark an AI-assisted writer and trainer. A great starting point is ‘What is AI and what does it mean for Accountants’
2025: the year sustainability reporting takes centre stage
Ross Haydock
Technical Consultant
Next year, sustainability/ESG (Environmental, Social and Governance) and the transition to a green economy will become an even hotter topic. To support this, sustainability reporting and assurance will be a priority.
There will be new standards announced by the UK government and new international guidance for sustainability assurance will start to be used.
AI to revolutionise accounting and auditing
Gavin Leake
Technical Consultant
By 2025, Artificial Intelligence (AI) is expected to transform accounting and auditing. Routine accounting tasks will become automated, improving accuracy and enabling real-time reporting.
In auditing, AI will enhance data analysis and risk detection, shifting auditors' roles from compliance to advisory.
Ethical challenges will emerge, particularly around accountability for AI-driven errors, ensuring professional judgment remains crucial in an increasingly automated environment.
Your training, your way’: it’s never been more true
Hannah Howe
Key Account Director
With more standards, regulations and tech developments to stay on top than ever before, my prediction is that in 2025, firms will be looking for a bespoke learning solution to meet their needs more precisely.
We’ll see more tailored training, bite-sized training, hybrid training, collaborative training and interactive digital training during the year as firms move away from a ‘one size fits all’ approach to the ‘best of all worlds’. Talk to us about how we can add value to your CPD hours!
AI and gamification lead digital marketing trends
Dale Hawkins
Digital Platforms and Innovations Manager
Digital marketing in 2025 will likely see more personalised and interactive campaigns. This includes an increased use of video, gamification and AI being used to create awareness and engagement. AI in particular will enhance the effectiveness of digital marketing for content creation and data analysis.
Thought leadership will also come to the forefront of the accountancy sector. Mercia's digital marketing solutions are designed to support accountants with easy-to-understand tax content, written by our experts.
The rise of on-demand and bite-sized learning
Lynn Radose
Product Director
As we continue to work in a more hybrid way, learners will want to access learning content at a time most convenient to them and to consume in shorter, more regular focused sessions.
The surge in consumption of on-demand and bite-sized content will continue into 2025 as firms continue to appreciate the flexibility and effectiveness this style of learning brings when updating or refreshing knowledge.
That said, we all know the benefits of human interaction and in 2025 we will see firms using this style of learning during team meetings or lunch and learn sessions; to promote discussion and interaction with the topic but without the need to take a whole day or half day away from the office.
Capital allowances guidance may spark debate
Steph Cartledge
Technical Lecturer & Consultant
The Autumn Budget was only a month ago, so it’s hard to predict what we might see in 2025. As set out in the CT Roadmap, there shouldn’t be any key changes to the capital allowances regime. However I do predict that any guidance released providing clarity on what qualifies for different capital allowances may spark significant debate.
Stay up to date by taking one of Mercia’s capital allowances courses and Mercia’s Tax Update courses in 2025 which are available online.
How new ESG legislation will impact SMEs
Melinda Maupe
Technical Consultant
'With global momentum building for mandatory sustainability reporting, 2025 will see a requirement to implement a raft of sustainability reporting legislation which will transcend borders and economic boundaries. This legislation introduces mandatory due diligence obligations to both EU and non-EU large companies. Medium and small companies (SMEs) shall not become immediately liable under these reporting requirements. However, said companies may unfortunately become in scope where they form part of the value-chains of those larger companies.'
Those individuals seeking registration as Sustainability Assurance Providers will be supported by Mercia as we finalise our products to get it to practitioners in early 2025 - our ESG
Major Tax Change in 2025: Non-Dom Regime Abolished
Pat Nown
Technical Lecturer and Consultant
One of the significant tax changes set to take effect from 6 April 2025 is the abolition of the favourable tax regime for non-UK domiciled clients. An individual’s scope to UK income tax, capital gains tax and inheritance tax will instead be based solely on ‘residence’.
Technology, regulation and sustainability driving change
Amir Hussain
Sales and Marketing Director
In 2025 the big drivers for change will be the increased utilisation of technology (such as Artificial Intelligence (AI), automation, blockchain, cloud computing and data analytics), evolving regulation (given the shifting geo-political landscape) and a greater emphasis on the sustainability agenda.
Therefore, to remain competitive it’s imperative that accounting professionals continue to invest in their professional development in both technical and soft skills. Mercia offers a range of CPD training courses that will help you stay ahead and achieve success in this evolving field.
A response to ISA 600 and resource constraints
Danny Noon
Technical Consultant and Author
As the revised ISA 600 becomes effective for audits of group financial statements, I’m anticipating some changes next year.
Group auditors will be adopting a more tailored and robust approach to risk assessment and the direction of group audits, and this will impact any appointed component auditors. This will result in increased collaboration, with greater reliance on technology to manage communications.
Many firms will face resource challenges due to the increased documentation and oversight requirements. A key challenge will be ensuring that component auditors meet the standards and expectations of the parent auditor, potentially leading to many firms exploring the idea of auditing the full group directly rather than relying on component auditors to streamline processes.
Rethinking firm structures for a changing profession
Jenny Faulkner
Head of Audit, Accounting & Compliance
Whilst technology and sustainability are absolutely going to be key contenders for 2025, I think ‘firm structure’ overall is perhaps more crucial. Firm structure will undoubtedly be affected by both advancements in technology and sustainability but will also be impacted by other changes in the profession, such as company size changes expected by the end of 2025 and changes to audit regulations in relation to the 75% supermajority issue and an increase in private equity entering the market. It is clear that firms of all sizes are carefully considering whether their current structure is fit for purpose. This maybe from a legal structure perspective or may also relate to the service lines offered within the firm.
Whether it be keeping yourself up to date on technical matters, support on compliance matters such as audit regulation or help with those softer skills training, Mercia has something to help!
