Benneyworth: A small practitioner’s journey into MTDby
Rebecca Benneyworth responds to AccountingWEB members’ negative views of MTD with observations drawn from her own expierence working digitally with very small client businesses.
I have been following the comments on AccountingWEB regarding the MTD announcements for years. Many of you will know that I have been interested in and involved in MTD since before it was announced to the public in December 2015. I first heard of the project (which was called something else at first) in August 2015 at a presentation for the Administrative Burdens Advisory Board which I have been a member of for around eight years.
Not for me – initially
I found the presentation about the future of tax in a digital world fascinating, although I could not see how my motley collection of clients would ever join in. At the time there was no suggestion that the new ideas would become compulsory, and they looked like an interesting idea – but not for me!
Things were getting more and more difficult for me in my practice at the time. My lecturing commitments were huge and my clients were as uncooperative with their records as ever. My story about asking clients to bring their books in early in the year that I underwent chemotherapy, surgery and radiotherapy for advanced breast cancer – with the result that absolutely none did – still provokes laughter, but unfortunately it was true.
I could not persuade my clients to part with their attempt at records early and I was beginning to hate my practice. Unlike other practitioners, I don’t have the luxury of running latecomers into February – my lecturing business starts up again in early February and there is minimal time for client work until Easter.
The crunch point
I had reached crunch point: either I had to radically change my practice or give up. I literally couldn’t go on any longer. But a number of things had conspired to offer me a way out. I had worked with AccountingWEB with a company called BankStream – and gained insight into what a bank feed could do – way before open banking.
I read the ICAEW Tomorrow’s Practice, which also referred to bank feeds and how artificial intelligence could recognise regular transactions and allocate them appropriately within accounting records to reduce processing time.
My way out seemed to be to go digital – go digital or die if you will. But what about my bloke with an exercise book, a pencil and a duplicate book for his invoices? Well, he was a good place to start.
I charged a fairly hefty fee because his records were so dreadful – hours spent trying to separate out a tangle of bank, credit card and cash payments so I could do a bank reconciliation. The fee was large enough to pay for a software licence and for me (joined by my daughter) to bring the bookkeeping in house. In fact, the move produced a better recovery on the time spent, as there was no mess to sort out and no waiting for records.
That spurred me on, and I started to move clients very slowly onto digital records.
The threshold issue
Like many of those commenting on Giles McCallum’s article last week, I was horrified at the thought of my clients being mandated into MTD, and at the £10,000 income threshold. But the last 4-5 years have taught me a lot. I am amazed at how many clients adapted to digital tools.
Of course, some have not – and we have had to be imaginative sometimes to come up with solutions for those who don’t “do” mobile phones or digital in any shape or form. The huge benefit for me is my own experience of being in practice.
I made this shift at first because it was do or die. I continued because I thought if MTD was coming I wanted to be ready for it. Now I cannot ever imagine going back to the drudgery of incomplete records work and the increasingly desperate pleas for paperwork.
Happy bookkeeping in house
I’m happy bringing the bookkeeping in house because I don’t have to spend time (much of which is not chargeable) sorting out the mess after the client has mucked it up. That little lesson was a favourite comment by Frank Woods at BankStream: don’t let them muck it up and then spend hours sorting it out. Why not cut out the middle man and get it right from the start? He is right – it is quicker and easier, and therefore more profitable.
So I’m responding to your comments and your worries – and please don’t accuse me of being out of touch. I have been in practice for 35 years, mainly dealing with mobile hairdressers, fencers, joiners, childminders and the like. I was six months pregnant for the first self assessment season and thought it couldn’t get any worse – how wrong I was!
But I’m now enjoying my practice and welcoming comments from very small businesses who feel more in control of their finances and are gaining confidence with digital technology as time goes on.
The absolute key to MTD is digital records. Get that right and everything else will follow with minimal effort. The technology has developed quickly and there is more to come – we just need to take those first steps. For me – I’m enjoying practice sufficiently that when I stop lecturing this will be my “retirement” – something I could not have imagined six years ago.
Hear what Rebecca Benneyworth, Steve Cox (IRIS) and HMRC have to say about preparing for MTD at Rebecca's 11:15am "bootcamp" session at the AccountingWEB Live Expo in Coventry on 1 December. Details and links below:
You might also be interested in
Rebecca trained in London with Kidsons and, on qualifying, spent some time as Chief Accountant of a manufacturing company. She now has her own small practice in Gloucestershire that comprises of owner managed businesses and small companies.
She also lectures extensively for a range of professional bodies, accountancy firms,...