Australia-UK trade deal unlocks opportunities for accountants

The Australia-UK Free Trade Agreement has opened career pathways for young people and created business opportunities for companies with growth ambitions.

When the UK Australia Free Trade Agreement (FTA) was first ratified in 2021, the ceremonial exchange by two former prime ministers of iconic biscuits – Penguins from the United Kingdom and Tim Tams from Australia – signalled the start of close trading relationship.

After the FTA came into force in May 2023, that spirit of goodwill opened the gateway to greater tariff-free trade, technology, skills and information flow and tightened the nexus between the two countries that already have close historical and political links.

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.

Mobility rule expands horizons for accountants

The agreement extended the age range and duration for Australians working in the UK, from 21 to 30 age bracket to 18 to 35, and increased the work permit duration from two years to three years. Australia-United Kingdom Chamber of Commerce CEO Richard Basil-Jones says the changes to the mobility rules were significant in helping people to expand their career opportunities.

He says it encourages deeper professional engagement and skill development and addresses critical skill gaps in both countries. Elizabeth Close, the deputy High Commissioner chief negotiator for the agreement, spearheaded a campaign to proactively sell the potential opportunities to business during a series of events, with bilateral support from the UK Department of Trade and Australia High Commission.  

Basil-Jones says many accountants from Australia and across the globe attended the events in London. “Our job is to unpack the Free Trade Agreement. It was the other parts – everyone knows about tariffs – we had to unravel” he says.

“And so, the very big one was mobility, and this one is where all small to medium-sized enterprises (SME) as well as big corporations are taking advantage of it.”

William Bain, Head of Trade Policy at the British Chamber of Commerce says this is “one of the most open youth mobility schemes of its type, globally”.

“There are also further sectoral arrangements which should build upon this for young professionals in both countries,” he says.

Career development and skill enhancement

The extension of the work permit duration to three years can supercharge career development by transforming short stints into significant career opportunities, allowing young professionals to develop their skills in a global context.

Basil-Jones says the provision allows younger professionals to view these opportunities as integral parts of their career journeys rather than just a temporary job.

The mobility and qualification recognition provisions are “very important chapters in the trade agreement, and they are promoting industry movement and people moving in between both markets”, Basil-Jones says.

Anecdotal evidence suggests many young professionals are already taking advantage of the new provisions. For instance, Basil-Jones says accountants at chamber networking events have taken advantage of the extended visa provisions.

Mutual recognition of professional qualifications

For Australian accountants, their credentials can potentially be recognised in the UK, facilitating easier transitions and reducing the need for extensive retraining. The agreement sets up a framework for recognising qualifications, with industry bodies collaborating to establish these standards to ensure professionals meet the necessary

However, the agreement does not prescribe the detail of “equal recognition of qualifications”, leaving that for industry bodies to negotiate. 

“[The agreement] sets up a framework where both countries will make the best endeavours to recognise each other's qualifications and we'll work towards recognising those,” he says. “It is still a work in progress and both countries are recognising that we have to get to a common ground – that’s the intent of the provision.”

The chamber is working to tighten the nexus between the professions in each country. “The UK government and Australian government's role in this country, in particular, is if there is an obstacle that is preventing you from that recognition to occur, they will step in and assist to remove it,” Basil-Jones says. “At the moment, it's left to industry groups to collaborate.”

However, there are concerns about the pace at which these frameworks are being developed. Basil-Jones says the onus is on industry associations to negotiate the practical implementation of qualification recognition across the two countries.

Bain 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 fully understand the impact.

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 expanded outsourcing opportunities, 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.