The deferral of Making Tax Digital (MTD) has not slowed accountants’ preparations, according to the latest survey by Thomson Reuters.
Whilst 86% of UK accountants agreed that the Government has made the right decision to delay MTD, 47% are still continuing with their preparations for supporting quarterly reporting even though the majority of businesses will no longer be required to submit quarterly reports – although they can choose to do so voluntarily.
Surveying 867 UK accountants, the majority at owner and partner level, 48% of accountants said their firm had taken steps to prepare for MTD in the run up to the previously expected ‘go live’ date of April 2018. 70% of those who had taken steps to prepare said doing so had highlighted areas of focus for the future, such as client training and adoption of new technologies.
Mark Purdue, tax product manager at Thomson Reuters, said: “The research clearly shows that there is an acceptance of the inevitability of MTD, and even quarterly reporting. MTD has just accelerated the pace of change amongst many accountants that are already preparing for a more digital tax future. Despite the changes to the MTD timetable, which are widely welcomed, many firms are choosing not to waste the time and effort they have already put into MTD and are continuing to make changes and seek out new technology to help them take on, and indeed benefit from the digital tax challenge.”
When asked for their opinion on quarterly reporting being voluntary for businesses below the VAT registration threshold, 49% agreed that these businesses should be outside the scope of quarterly reporting. Interestingly, 28% thought these businesses should be encouraged to do quarterly reporting if they could do it, 7% thought all businesses should be included by April 2020, and 13% thought such businesses should be included but via a phased approach.
Yet, and in contrast, only 29% think quarterly reporting offers efficiencies with 53% of accountants believing that quarterly reporting doesn’t offer efficiencies. Whilst 61% of accountants agree that digitising the tax system is the right approach, 27% disagreed and 12% were unsure.
“Quarterly reporting was indeed the most controversial aspect of MTD,” explains Purdue, “and no accountancy firm wants to increase its workload without any payback. At the same time 63% of accountants think that quarterly reporting is inevitable for all businesses in the future. If quarterly reporting is inevitable for all businesses, and accountants are concerned about process efficiencies, adopting the right technologies is paramount to success.”
He continues: “I firmly believe that being able to access near to real-time financial information will enable accountants to grow their practices and offer a more proactive and advisory service to their clients. What is positive is that MTD has encouraged and is still encouraging many firms to make changes – getting their clients to send in their books early, moving clients from paper to digital records, taking steps to streamline processes, review their own fee structures, and improve client education. Now is the time to plan and ensure that both you and your clients benefit from the inevitable changes to come. Digital tax is already happening – make it happen for you.”
What does the deferral mean for accountants? View Mark’s latest webinar on-demand for trusted insights.