We start the year 2025 with a young UK government that still has a lot to prove, a seismic political shift to take place in the US, and political uncertainty across the European continent. The bumper election year of 2024 saw a pervasive anti-incumbency movement that also highlighted the widespread erosion of trust in institutions as the world still steadies itself post-COVID19 pandemic. 

That trust needs to be rebuilt, across the board – by politicians, the media, the third sector and business. Accountants have a role as custodians of trust, exercising professional judgement and professional ethics to evaluate corporate behaviours and ensure that business operates honestly, and to the benefit of its stakeholders. Increasingly, it also ensures that it considers the environmental and social impacts of its operations. 

With that in mind, it is clear that the work of the profession is crucial in delivering more stability in an increasingly unstable world. 

Growth 

Quality audit and accountancy work also supports economic growth, which is a necessary component of restoring trust. The anti-incumbency trend across 2024’s elections was driven in part by a perceived lack of economic performance, primarily driven by the knock on effects of the pandemic. It has contributed significantly to that loss of trust. Accountants can help to buck the trend. 

ICAEW is supporting its members in this by actively participating in discussions around the UK government’s plan for growth, in particular its Industrial Strategy . The UK economy thrives when it embraces what it does best and encourages open and free trade across the world. ICAEW hopes that this will be addressed as part of the government’s strategy when it is released in the Spring. 

A modern industrial strategy is critical to ensuring the foundations are in place to generate strong economic growth. It is always difficult to strike the right balance between policies that help the entire economy, or targeted intervention in certain sectors which boosts growth in those areas in which we in the UK have a global advantage. We think that with this green paper the government has got that balance about right.

Businesses want certainty, clarity and stability. They want long-term incentives to invest, employ more people and stimulate growth. That requires consistency of policy and clear levers to encourage that growth. 

Professional services is a huge growth opportunity for the UK, and we want to see it supported as part of any UK Industrial Strategy. Beyond the standard financial work and consultancy, there are opportunities to lead the world in emerging areas. For example, the UK profession is already attracting overseas business from companies looking to tap into the quality of its sustainability disclosure and assurance work. 

This will in turn support productivity, create growth elsewhere in the economy, increase tax revenues, boost employment and encourage prosperity. 

Protecting skills

Another important element of that Strategy has to be higher education. It is a sector worth £41.9bn since the 2021/22 academic year. It has the potential to deliver considerable export value and attract the best talent to the UK. 

In a rapidly changing world, we also need a workforce that is well prepared with the knowledge and skills it needs to deliver in that environment. Higher education can support that. We need to improve access to high-level skills, which is why ICAEW is pushing for the government to maintain funding for Level 7 apprenticeships  . Removing such funding could create a significant talent drain at a time when we need a strong professional sector. 

Since the introduction of the Apprenticeship Levy the number of school leavers entering accountancy has doubled, which proves that Level 7 apprenticeships are putting more high-level skills into the economy. In 2022/23, there were 9,600 Level 7 accounting and taxation starts, with 79% of ICAEW apprentices aged 24 or under.

Without that funding, we run the risk of firms creating jobs overseas rather than in the UK. It is something that ICAEW will be continuing to fight to protect in the early months of 2025.

Upskilling for the future

On the subject of skills, accountants need to be getting to grips with the technological advances that are reshaping the way that we work. In 2024, ICAEW put together a suite of articles, videos and resources on artificial intelligence (AI) , which will continue into 2025. A big focus of this campaign is to provide members with a basic knowledge of AI that they can use as a starting point for developing new skills and introducing AI into their working lives, responsibly. 

We also see the continuing development of sustainability disclosures, which is increasingly falling under the remit of accountants. A recent episode of the ICAEW Behind the Numbers podcast  outlined how professionals can shift their mindsets to align sustainability and finance thinking when it comes to corporate reporting. It’s a topic we will revisit in 2025 as more companies come under reporting regulations. 

Digital taxation

Making Tax Digital for Income Tax is on the way from 2026; 2025 is the time to be prepared, and millions of taxpayers will be looking for support from accountants to get themselves ready for the change. ICAEW’s Tax Faculty is producing content to help with this, including an episode of the Tax Track podcast  – which we launched this year. More articles and podcast episodes are incoming, and helpsheets, guidance and articles can be found on our Making Tax Digital  page.

Audit reform

This year will also see audit reform  finally move forward. ICAEW has been actively involved with discussions with the Business and Trade Secretary Jonathan Reynolds and has outlined its priorities for audit reform: a proportionate, statutory regulator with oversight of directors; flexibility around PIE thresholds; and a healthily competitive audit market. 

ICAEW believes that a carefully balanced approach to this legislation is essential. While high-quality reporting will secure investor confidence, proportionality is key to avoiding undue burdens. 

The UK is already a world leader in professional and business services. Appropriate, high-quality legislation can underpin this success and help achieve the economic goals set out in the industrial strategy.

The newly launched Centre for Public Interest Audit (CPIA),  should support an audit and assurance environment that builds confidence and trust in UK audit work. Its annual audit trust index should provide a benchmark for progress. 

Security and stability

The world is still recovering from a series of once in a lifetime shocks, some of which, such as the global financial crisis, have quite long tails. Others are still ongoing, such as the war in Ukraine and conflict in the Middle East. 

Resilience is key to get through the other side of this period in the best economic health. As climate-related crises increase, that economic resilience will be even more pressing. ICAEW is encouraging more focus on value chains and sectors most vulnerable to geopolitical uncertainty. 

While there are many unpredictable elements to 2025, opportunity still exists, especially for the accounting profession. ICAEW will be helping its members as they support the world’s businesses navigate a path to growth and prosperity.