Rumour has it that HMRC are beavering away with the development of Making Tax Digital systems while under purdah. Accounts and tax software developers are getting to grips with government API links – under MTD, access to clients’ personal tax accounts will only be available via these links – and meanwhile, back at the coal face, practitioners are drumming fingers on tables entirely at the effect of developments over which they have no control.
Potentially, there are only ten months until the first batch of self-employed clients (those with turnover in excess of the current VAT registration threshold – £85,000) will be required to consider their first accounts data upload.
Most affected clients will seek training and reassurance from their advisors before parting company with their accounts information. Many will leave the management of the entire process to advisors or their accounts software. Whichever path is considered; advisors will likely experience a sea-change in the volume of filing updates for clients that they will need to manage.
Does this process offer opportunities, or close service development doors for practitioners? Our guess is, this will depend on how effectively firms communicate the value of additional work required.
If all that clients perceive, is an increase in fees – to manage the additional data uploads – there will possibly be resentment and resistance to paying higher fees. On the other hand, if MTD filing becomes a smaller part of a quarterly accounts and tax review process, it will be much easier to communicate value.
Within a few years, new businesses will absorb the MTD demands as a normal part of their tax compliance chores, so in effect, practitioners will only have to manage a change process for existing clients. There is no doubt, that data management will become an increasing part of our compliance chores if MTD goes ahead. The test will be, post-election, will we see the washed-up parts of the Finance Bill 2017, re-introduced?