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Industry Landscape
The SME accounting software industry is experiencing robust growth, driven by increasing digitalization, cloud adoption, and the need for efficient financial management. Automation, AI, and integrated payment solutions are key trends. The market is competitive with both established players and new innovators focusing on niche needs like global capabilities and mobile accessibility.
Total Assets Under Management (AUM)
SME Cloud Accounting Software Market Size in United Kingdom
~Approximately $1.5 Billion USD (2023)
(15-20% CAGR)
- Driven by increasing digitalization among SMEs.
- Enhanced efficiency and cost-savings from cloud solutions.
- Growing demand for integrated financial management tools.
Total Addressable Market
5.5 billion USD
Market Growth Stage
Pace of Market Growth
Emerging Technologies
AI-powered Automation
AI will increasingly automate complex accounting tasks like reconciliation, categorization, and even predictive financial analysis, significantly reducing manual effort and errors.
Blockchain for Transparency
Blockchain technology can enhance the security, transparency, and traceability of financial transactions, revolutionizing auditing and cross-border payments.
Open Banking APIs
Expanded Open Banking APIs will enable seamless and secure integration of accounting software with a broader range of financial institutions and third-party applications, creating a more interconnected financial ecosystem.
Impactful Policy Frameworks
Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) - Phased Rollout (UK)
Making Tax Digital (MTD) for Income Tax Self Assessment (ITSA) is a UK government initiative requiring self-employed individuals and landlords with income over £50,000 to keep digital records and use MTD-compatible software to submit quarterly updates of their income and expenses to HMRC, with a phased rollout starting from April 2026.
This policy mandates digital record-keeping and MTD-compatible software usage, compelling more UK SMEs and freelancers to adopt solutions like Fiskl for compliance.
Online Sales Tax (UK) - Consultations (Ongoing)
The UK government has been consulting on the introduction of an Online Sales Tax (OST) to rebalance the tax burden between online and physical retailers, with potential implications for how online transactions are taxed and reported.
If implemented, an Online Sales Tax could necessitate software adjustments for calculating and reporting new tax obligations on online sales, impacting businesses with e-commerce operations.
Data Protection and Digital Information Bill (No. 2) (UK) - Enacted 2024
This bill updates the UK's data protection regime, building on GDPR but introducing UK-specific changes to streamline compliance for businesses while maintaining high data protection standards, including rules around AI and automated decision-making.
The updated data protection laws require accounting software providers like Fiskl to ensure their platforms comply with new data handling, privacy, and security standards, especially concerning user data and AI features.
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