Brought to you by
Thomas Reuters Logo

Award winning Digita Software from Thomson Reuters.

Save content
Have you found this content useful? Use the button above to save it to your profile.

Reaction to Making Tax Digital Consultation

22nd Aug 2016
Brought to you by
Thomas Reuters Logo

Award winning Digita Software from Thomson Reuters.

Save content
Have you found this content useful? Use the button above to save it to your profile.

Just two weeks (2 August 2016) before the long-awaited release of the Making Tax Digital (MTD) consultation documents (15 August 2016) we polled more than 350 accountants.  Unsurprisingly, 91% feel there isn’t enough information available on MTD, and this lack of information has caused much uncertainly, speculation and concern. 

As a result, it is good to finally have some detail and clarification especially around how quarterly reporting will work in practice.  The flexibility for the reporting period length will also go some way to help seasonal businesses, so they can plan their own reporting periods to avoid their busiest time.  The ability to make periodic voluntary payments will be of use to those most worried about getting too far in ‘tax debt’.

It is also good to see that, as part of the consultation process, HMRC has listened to the accountancy profession and businesses in addressing the following concerns:  

  • Digitally excluded individuals will not be forced to be part of the system
  • Small businesses (turnover less than £10,000) will be excluded from provisions entirely
  • Next tranche of businesses (turnover between £10,000, and amount to be determined) will be deferred to 2019.

However, the consultations are somewhat light on detail when it comes to agent access.  On the face of it, it looks like the agent authorisation process will only be possible via the client’s tax account, meaning that each and every client will need to create his or her own tax account, only to press a button to authorise their agent. This could quickly escalate into a major administration nightmare for businesses, accountants and HMRC so it will need to be addressed swiftly. 

There is also a question mark about the ability for an individual to challenge the third party data held by HMRC – the resolution process is between the individual and third party directly, with HMRC taking no active role (other than deferring use of the information). 

Again, this could become a real burden so we will be making our views known when we meet again shortly with HMRC to provide our consultation feedback.    

Since the early stages of MTD, we have been working closely with HMRC to ensure that software is available to support MTD and that it meets the needs of accountants and clients – ensuring our software links correctly with HMRC systems and the digital accounts. 

In sounding the death knell for the tax return as we know it, MTD presents a great opportunity for accountants to benefit from a new way of working, and updated real-time information will bring them closer to clients – widening their advisory remit to provide continuous tax and business planning throughout the year rather than the annual 31 January hangover suffering.    

We are urging accountants to make sure they understand the impact and opportunities of MTD, and get their voices heard so that the new tax system is indeed more effective, more efficient and easier for all.

To find out more and to provide your views and concerns as part of the MTD consultation (ends 7 November 2016), visit:

https://www.gov.uk/government/collections/making-tax-digital-consultations

Mark Purdue | Product Manager – Tax, Thomson Reuters
Mark has spent over 25 years working in tax and specialises in Personal and Capital Gains Tax. After beginning his career as a Revenue Officer at HMRC, Mark worked for a number of years as a Tax Senior at an in-house tax department for a UK stockbroker, dealing primarily with high net worth individuals. He joined Digita in 2006, working on support and as a Business Analyst before becoming Product Owner for Digita's Personal Tax product. He now holds the position of Product Manager for Tax. He and the team are currently working closely with HMRC over the upcoming move to Making Tax Digital.

Thomson Reuters

Thomson Reuters is the world’s leading source of news and information for professional markets. Our customers rely on us to deliver the intelligence, technology and expertise they need to find trusted answers. The business has operated in more than 100 countries for more than 100 years. Thomson Reuters shares are listed on the Toronto and New York Stock Exchanges (symbol: TRI). For more information, visit www.thomsonreuters.com.

Tags: