Meet the firms making the most of Making Tax Digital (part 2)
Hilary has been working in accounting for 30 years and now heads up the online accounting offering for Anderson Anderson & Brown — a large firm with 19 partners and over 250 employees.
Hilary and her colleagues have been using Xero’s Making Tax Digital (MTD) for VAT functionality to get their clients MTD-ready.
And with MTD for VAT fast approaching, Hilary explains why firms need to prepare now.
When did you first encounter cloud accounting software?
I was first introduced to cloud accounting software eight years ago, by a client who wanted to make the switch from his desktop software and I’ve haven’t looked back since.
In my current role, I head up the online accounting offering for the entire firm.
Hilary Dyson has been working in accounting for 30 years.
Tell us about Anderson Anderson & Brown?
Anderson Anderson & Brown was founded 30 years ago. We have offices in Aberdeen, Edinburgh and London.
We work with a vast range of clients, from one-man-band businesses to large multinational companies, offering the full range of services including advisory, consultancy and compliance.
When did you first start using Xero?
Anderson Anderson & Brown partnered with Xero five years ago – we knew online accounting would be the future of accountancy and we wanted to get ahead of the game.
Given the size and diversity of our client base, it was important to understand where online accounting would be a good fit and to educate our team to spot those opportunities.
As you can imagine, any major change will meet resistance, or at the very least apathy, but we’ve come a long way since our initial switchover.
There is now an acceptance that accounting software can underpin our services, and lead to other cross-servicing opportunities which might otherwise have been missed.
Thinking in terms of before and after online accounting, what are some of the most clear-cut differences or biggest wins?
There is a higher level of interaction possible so we have a closer relationship with our clients.
We’ve also expanded our offerings relying less on traditional compliance work and doing more advisory work.
At the moment, we’re actively expanding our Virtual Finance Function, which is made possible by the use of accounting technology.
We offer a range of services – from outsourced bookkeeping to Chief Finance Officer level, working with clients to give them an efficient accounting process with robust and up-to-date financial information.
Tell us about your experience with Making Tax Digital so far?
Our first task was to establish the scale of impact on our clients. We did a segmentation exercise identifying clients we needed to switch over to MTD-compatible software.
It was an interesting exercise – we identified clients who would be suitable for a straightforward conversion to Xero.
But we also identified a large number of clients that were using bespoke software that wasn’t compliant with MTD for VAT.
Since then we’ve been converting clients where possible and offering a bridging solution for those that needed longer to implement a completely new system.
When did you sign up to Xero’s Making Tax Digital for VAT functionality?
We signed up in January 2019 — it was important for our clients to know we were leading the way, so that they could rely on us to ensure they were compliant.
Our Xero MTD-ready badge is another indication of our commitment to offering the best service to our clients.
What did you make of Xero’s Making Tax Digital for VAT functionality?
My colleague Lynsey Taylor is the expert when it comes to Xero’s MTD for VAT functionality and she’s had a seamless experience so far.
She loves the built-in VAT functionalities showing the VAT due and VAT submitted. The direct link to HM Revenue and Customs is excellent too.
So far we’ve submitted five VAT Returns through Xero — one client has even submitted two VAT Returns herself and said it was a really straightforward process.
What advice would you give to firms that aren’t Making Tax Digital compliant yet?
If you are not helping your clients to be compliant then someone else will.
MTD for VAT isn’t optional, and if your clients feel you aren’t keeping them informed and compliant they may well vote with their feet and find someone who will.
Don’t be afraid to get lots of clients signed up in one go — we did that and it’s a huge weight off our shoulders knowing more clients are becoming compliant.
Plus it gives us more time to focus on clients for whom signing up for MTD might be more complex.
Why is Making Tax Digital an opportunity for firms?
MTD for VAT impacts every VAT registered business in the UK and until recently it’s been up to accounting professionals to communicate the changes to their clients.
I suspect there are businesses out there that are still unaware of — or ignoring communications about — the upcoming MTD changes so there is still a lot to be done over the next six months or more.
This is a huge opportunity for MTD-ready accountants to support these businesses, so don’t delay in getting your practice ready.
If you’re a Xero partner, you and your clients that meet the latest criteria set out by HMRC can join Xero’s MTD for VAT beta programme now. For more information speak to your account manager or email [email protected].