Change your MTD mindset
Accountants have been growing increasingly frustrated with the forthcoming changes to MTD. Norman Younger advises embracing the process in your firm.
The upcoming shift to MTD for income tax has been a source of vexation for countless accounting professionals. Members of AccountingWEB have been voicing their frustrations on the prospect for some time, with many dubbing MTD a “train crash” waiting to happen.
Getting on the train
“Is this madness still going ahead next year? We can’t even really see clients and the ones who don’t want to know about computers will be even harder,” asked AccountingWEB member 0098087.
“Remember that the train crash will only affect you if you get on the train,” added Tornado.
Spring complaints that the demands of accountancy are becoming too much to endure are common, but the next phase of MTD has become a catalyst that may encourage many practitioners to throw in the towel early.
“The MTD train coming down the track, together with the excessive cost of AML registration already here, has put an end to all of that. Time to move on to things more enjoyable,” said Michael King.
Calling it a day
This stance is increasingly common in Any Answers in the wake of a tumultuous year that has left many practitioners feeling worn out. And more of these accountants are vowing not to be a part of MTD: “With MTD for IT coming down the tracks in 2023 I have decided that the 2020/21 tax return cycle will be my last,” an anonymous user told AccountingWEB.
“I shall be sorry to call it a day, but the pointless bureaucracy, astounding inefficiency of HMRC and everything else is all getting to be too much of an effort to deal with,” added MG Weemys.
Even for those not yet ready to retire, the prospect of MTD for income tax has still had a damaging effect: “I’m in exactly the same position (except that I’m 42 and fed up with it all),” said adf2410.
“I can’t afford to retire so I will just have to cope,” said Jo Nokes.
“It’s the straw that broke the camel’s back - there’s been so much change in recent years in the profession,” said Maximiti founder and director Norman Younger. “How to interact with HMRC isn’t getting easier, deadlines are getting tighter… For many practitioners, it’s one step too far.”
Even though MTD for VAT has now bedded in and the government is set on extending the regime to income tax, some accountants still question whether MTD will be feasible to replace the individual self assessment regime.
“The prospect of MTD for income tax fills me with horror,” said jon_griffey.
“In my opinion MTD [for income tax] is an impossible proposal so I will not be taking it seriously,” said Tornado.
“I stressed about this a few years ago but no longer - it is completely unworkable,” added Southwestbeancounter.
Yet the MTD train continues to roll on regardless of the profession’s resistance.
“Not sticking is not an option,” warned Younger. “The positives are that for many firms, it means that it whips clients into line.”
If a deadline is imposed by the government, Younger assured practitioners that the majority of clients would prefer to hand over the more complex and technical work to their accountant – which tends to increase their engaged with the compliance process.
Although it might sometimes feel like software is taking over, the MTD transition is an opportunity for accountants to embrace the technology and approach their practice in new ways, he added.
Adapt to MTD
“In terms of adapting, it’s about the roots and branch. Go through your practice - what can you do differently?” advised Younger.
Breaking out of the firm’s habitual cycles will help you make the shift to MTD. With so many practices struggling to adapt, adopting a proactive approach will not only help ease you into the new way of working, but could open the door to new clients left behind by their current advisers.
Shifting your mindset is an important part of adapting. Younger suggested seeking advice from consultants, who can also help you bring employees struggling with the transition to buy into your plans.
“Perhaps host a webinar seminar to fill them in all at once,” Younger suggested.
Up your fees
MTD is likely boost practice fees in several ways. In a recent MTD webinar for AccountingWEB live, tax expert Rebecca Benneyworth reinforced the advice to get your entire team prepared in the run-up to MTD to make the process easier for clients.
Bringing the bookkeeping in-house is a very simple way to increase revenue, and applying the right tools can turn this entry-level service line into a very tidy profit centre that works for both parties.
“If we automate it as much as possible, and take it away from clients so they can’t mess it up, I’ll feel happier and more comfortable,” said Benneyworth.
There is also scope to increase the value of your services through during the transition, as MTD presents a perfect opportunity to talk to clients about fees: “Accountants are not always brave when it comes to charging. But the clients are going to have to pay for it in some way, shape or form.”
Hear Rebecca’s top tips for getting clients on board with MTD in our recent AccountingWEBLive webinar here.