Making Tax Digital at the House of Commons
Recently I attended a Making Tax Digital (MTD) forum at the House of Commons. At the forum were various Members of Parliament, fellow accountants, software providers and highly engaged Government representatives.
It was not surprising to hear from the Financial Secretary to the Treasury that the Government is fully committed to MTD and indeed he stated, “there will be no further delays”.
At Baldwins we have been preparing for MTD for the past two years and we are now on the final countdown to the first businesses being required to submit tax information online in April 2019. The message is loud and clear that MTD is coming and is not going away.
In the background there remains a lot of technology challenges for HMRC to test and implement. In particular, working on new APIs between the Government’s new digital system and software suppliers & developers. So, it is possible, even likely, that given the short time period remaining to April 2019 there will be glitches, IT issues and problems with the systems.
My recommendation is to plan early for compliance with the MTD regime. In my opinion it would seem sensible to opt for the larger and well-established software solution providers. They have committed lots of resources and have dedicated helplines and teams of staff at the ready to help their customers with problems, which will inevitably come with the introduction of new technology; particularly in the beginning.
Spreadsheets may not be the best option to use in practice as HMRC are focused on mainstream software links and digital applications. Creating robust bolt-ons and APIs to link spreadsheets into the overall MTD framework is likely to be lower down their priority list and may end up not enabling businesses to meet their reporting requirements.
It is vital to engage with your business advisors and discuss how you can migrate to a digital platform in plenty of time. Cloud accounting and digital platforms also offer a new basis for a more valuable pro-active relationship which is focused on business advisory.
Baldwins is already on the front foot in advising clients on MTD compliance and can offer a digital relationship with clients who want to ensure they are meeting requirements and at the same time, improve their business. A recent estimate by a leading software provider suggests an average SME business could save around £17k per annum by switching to digital cloud accounting. I would suggest this is a prudent estimate given the many other intangible benefits available.
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