Accountants bear MTD brunt of educating clientsby
Richard Sergeant tackles the beast that is MTD, covering what to do, how to get your team on board, and how to talk to clients about it.
Soon-to-be-released research from Thomson Reuters suggests that the number one challenge around MTD for the self-employed will be educating clients.
Perhaps surprisingly, choosing the right technology is way in the distance. Underpinning this is likely to be a cultural and behavioural change, as much as a digital one.
Given that HMRC’s communication during the MTD for VAT run up and implementation was noticeably ‘last minute’, there must be a fear that history will repeat itself and the most-trusted-business-adviser will once again bear the brunt of getting taxpayers over the line. With huge numbers on the cusp of making the transition the scale of this can’t be underestimated.
Having lots of time on their hands isn’t something that accountants are renowned for, and with an intense year supporting businesses through the pandemic, it’s no surprise that few are rubbing their hands at the prospect of getting stuck in.
But if you dig behind the research and the case is being made for starting sooner rather than later.
Education and training
Basic knowledge around MTD for the next cohort must be hovering around zero at the moment, so there’s a basic job to let them know it’s on its way. Feedback from firms actively trying to tell clients about what is coming up suggests that it is largely going in one ear and out the other. It is a problem that I think we can all recognise.
This issue isn’t about the capability of understanding, but the inclination to understand. It won’t impact clients for another couple of years yet, so what’s all the hurry?
Even the most proactive I’ve spoken to accept that flagging up the imminent changes is easy to do, but it’s hard to make a compelling case for making an early move. This is a hard sell, and one we don’t have very long to make if it’s not all going to be last minute.
So with phase one being communicating the new rules and obligations, it’s not hard to see why tech choices fall down the list. In fact, let’s just take the tech thing off the table for now – no major supplier can afford to not have an MTD ready solution – your IT will work.
However, getting that tech into the hands of clients, training them on it and getting them to use effectively is part of this long challenge of change management.
One aspect is discipline. Let’s say that’s about remembering to get everything done – and on time. It’s one thing to take a photo of a receipt, and it’s another thing to make sure the thing is legible. For those that have been used to an annual accounting regime, this could come as a shock, and one which has no immediately discernible business benefit. So if you’re telling them now (perhaps repeatedly) about what is coming on the horizon, it will at least help to reduce the chance of them denying all knowledge.
The training aspect is a bit more tricky. With a range of data collection options, there should be something for everyone, but trying to get this done last minute could put you under considerable pressure. As with most things, the earlier clients can start the longer the time they have to get used to things and for you to iron out both their creases and your own.
Highlighting the service options
Another hot question is who is going to do the review of figures and the filing with HMRC? The Thomson Reuters research seems to back up my own which is that there are few prepared to let this be their clients sole responsibility.
It’s hard to be too general about this, but the interpretation is that some can be trusted to be left alone to get on with it, and some will need more support ranging from a high level review to full outsourcing of bookkeeping – and yes, everything in between.
Which means clarity around your service offering is also a priority: What do clients need, what do you want to provide, and at what cost. The more it touches the firm, the higher the cost will be.
The more options you have, the more certain you need to be that you are prepared and that the right clients can be steered in the right direction.
So again preparing them in advance as to what their options will be, and being aware that there will be a cost implication (even if it’s to be confirmed), paves the way and may even provide them with some added motivation to make changes now to save money in the future.
Start if you can, and keep going
I think this is tough, and you’ve got to give yourself the best opportunity to make it as least stressful for you and your staff as possible.
I’m not in the habit of giving advice to accountants about how to run their practice, but I am happy to talk about aspects of change management.
- You know enough of the basic requirements, this should apply to the majority of those impacted – this gives you the place to start.
- Start to tell them early – really early and keep telling them.
- Begin to define your service options – it will also help in your communications.
- Think about the tech, but don’t overthink it
- Pick out your outliers and those that you know will struggle and talk to them individually
And if you can, start to create a positive case for clients to move. There will be lots of material coming out from vendors, and I would pick through these carefully and take the easiest to repackage and pass on.
And what about delays
We can’t bank on delays. Given the huge size and broad range of abilities in the next cohort it’s hard to see how a soft landing would work without creating all kinds of grey areas and ambiguities. Getting the message across therefore needs to start now, and before the threat of fines, or even perhaps experiencing a few, has a chastening effect.
When it comes to MTD, your clients have much to learn