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How to demystify Making Tax Digital for your clients

15th Apr 2024
Brought to you by
capium

Capium is cloud based accounting and practice software.

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

Most accountants we speak to are pretty sick of hearing about Making Tax Digital - probably because it often goes hand in hand with words like ‘delay’, ‘confusion’, and ‘misconception’... And that’s understandable.

How to demystify Making Tax Digital for your clients
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With the changing goalposts, an excruciatingly staggered approach, and questions from many in the industry about the value of MTD for specific client demographics in the first place, it makes sense that it’s not your favourite topic. 

For clients though - whether they’re individuals or larger corporations - there’s still a lot of myth-busting to be done around MTD and what it means for them. And, as their accountant, you’re often the one they’ll come to with questions. 

Here’s our tips on quick and easy ways to demystify MTD for your clients.

Question 1: Can I just ignore it? 

Let’s address the big one first. Because of the staggered introduction to MTD and the delay to implementation, you might find clients are tempted to ignore MTD altogether - or assume it probably doesn’t apply to them, and that they’re free to carry on reporting manually.

Quick win: Communicate proactively 

Rather than allowing MTD to present itself as a looming figure on your clients’ horizon, be proactive about explaining if and how it applies to them - and what it’ll mean in practice.

Clarify the situations where MTD is mandatory, emphasise the importance of compliance, and reassure them that, while MTD may introduce changes to the way they (or you, on their behalf) report, it represents a positive step that’ll ultimately make it easier for them to stay on top of their financial data and reporting obligations. 

Question 2: Isn’t MTD complicated and time-consuming?

One of the top concerns about MTD is that it’s overly complex and confusing - and likely to require lots of time, effort, and resources to comply with. With the right tools, though, complying with MTD doesn’t have to be tricky - and can be integrated into the way clients are working already. 

Quick win: educate and simplify 

As an accountant, you’re already an expert at making something incredibly technical sound simple and straightforward - it’s how you interact with your clients each day. 

Apply the same approach to explaining MTD to clients as you would complicated tax regulations: break down complex concepts into digestible chunks, focus on the benefits, and talk them through how software and automation can - once MTD’s set up and running - save time and effort in the long-term.

Question 3: I don’t know what software to use - will it be expensive?

As with any new digital requirement, cost is a common concern - and clients may be worrying about the potential cost of expensive software or technology upgrades, particularly if they’ve only recently adopted software in the first place. 

Quick win: showcase solutions and provide recommendations

Firstly, it’s worth reassuring clients that MTD software is designed to be accessible to businesses and individuals of all shapes and sizes, and doesn’t necessarily require costly investment. Many providers have tiered solutions that make it easier for clients to transition to digital reporting - and some clients might already be using MTD-compliant software without realising it.  

Secondly, it’s not just the cost of software that can hinder client willingness to adopt digital solutions - it’s the process of selecting it, making sure it’s compliant, and being sure that it’ll do what they need it to do. 

As an accountant working with clients of all shapes and sizes, you’re well placed to show them a couple of different options and make a recommendation about what could suit them best. 

A win for both sides

Ultimately, by demystifying MTD for your clients, you’ll be able to reassure them and put their minds at rest - but you’ll also make your job, both now, and in the future, much easier, too. 

By proactively addressing misconceptions about MTD, and providing ongoing guidance, you’ll help clients feel more confident with digital transformation and encourage early compliance - avoiding headaches for you later down the line. 

We’ve put a lot of development time into our own MTD software. Sign up for a demonstration or a free trial today.

CAPIUM MTD SOFTWARE