What has MTD ever done for us?
Richard Sergeant takes stock of the recent developments around the introduction of MTD, and asks if it really wasn’t such as waste of time after all?
MTD has seen some fierce opposition from the profession, with some real justification, equalled only by the relief its delay has brought.
However, on reflection, I think the last eighteen months or so has provided an opportunity for the broader accountancy sector to reflect hard on how it operates, the impact of which has arguably been positive.
Government has acknowledged that things need to change
Since the 2015 budget announcements, we have been hearing about the ambition for a “world class modern digital tax system” from government, and this is to be applauded. The fact that the timescales seemed hopelessly unachievable took the edge off a bit. But now there is at least a fighting chance to have the technical standards, infrastructure (and hopefully) the legislative clarity about how this is going to work in place first. Acknowledging and pursuing that change in the medium term can’t be a bad thing for an increasingly digitalised world.
A wide and inclusive debate galvanised the profession
Never short on opinions, the debate amongst accountants and the wider market has been significant. Not only in its passion, but also in its depth and breadth of argument. Having implications far beyond the simple digitisation of tax records has encouraged the level of discussion we haven’t seen for some time - significantly assisted by much of it taking place on digital channels (like AccountingWEB and social media).
The perhaps ironic element however, given this exposure, is the lack of engagement by and to the business community at large. The reason for delays is undoubtedly a mix of practical, communication, technology and politics, but the vociferous and well-thought-out engagement of accountants has played a key part.
The big rethink: collecting client data and internal processes
Regardless of how much ire has been vented at HMRC, all UK firms have now had the chance to reflect on what the impact of the original proposals would be to both themselves and every single one of their clients, as Jennifer Adams blogged recently.
Not least the practicalities of moving to digital record keeping, but also the significant impact on workflows, internal systems and the resources required. For some, this has had the impact of seriously reviewing their offerings and putting plans in place. And I would suggest that they don’t stop there. We now have the model of what we might expect more of in the future, and putting the investment in now could prove transformational.
Software providers kicked into action
For those being asked to deliver the technical goods by both accountants and HMRC, this has probably been the most unprecedented, and expensive, round of development programmes they have had to contend with. I can’t prove that, but if you add up all the meetings, pouring over technical specifications and actual development time, this has been a substantial investment.
The promises around functionality and reform are now public record and we should continue to expect along these lines. Greater integrations between systems have already been a great bi-product that would have come anyway but has been speeded up - in particular between practice management/accounts and bookkeeping software.
Engagement with clients
Engagement on issues where the details are hard to come by is by no means easy. Especially as we know clients will be expecting answers, not just to be told of the problems. It’s been interesting to see the range of approaches here, and it has been broad. But opening dialogue around the systems they are using, and the direction of travel they should be going in, can only be positive - as AccountingWEB blogger youngloch says towards the end of this recent post. There is momentum here that should be maintained, especially by those that have seen MTD as the lever to move more appropriate clients to the cloud.
MTD is delayed, long live MTD
The plan has been jettisoned, but let’s not forget that it’s not gone away. There is also a timetable in place to bring more clients on to digital record keeping and filing. In many ways there is even more uncertainty now about the future of MTD than there ever has been, however at least we’ve all been warned. What comes next will be more thought out, more prepared and may come round quicker than we think.