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How Infinity Partnership is preparing for MTD

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It cannot be said often enough that when a major change programme like MTD looms on the horizon, the planning process is paramount.

3rd Dec 2021
Editorial team AccountingWEB.co.uk
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A task such as migrating hundreds of non-digital clients into the Making Tax Digital regime may look daunting from the outset. But if you map out the different steps you need to take with different client groups, and break the workload into chunks over time, you can uncover a way to overcome the obstacle course.

Greg Houston from award-winning practice Infinity Partnership recently volunteered to act as a pathfinder for other firms by setting out how his firm is tackling the transition to MTD.

To set the scene, Sage product marketing director for accountants and bookkeepers Chris Downing highlighted the need to think about clients in terms of their business types - for example sole traders, landlords and those with more complex income steams. Then, he added, consider their willingness and aptitude to use accounting software solutions. both VAT and income tax.

“You cannot miss how important that segmentation is,” he said, adding that it would shape how you work with clients over the next 18 months.

Work in progress at Infinity

For Aberdeen-based Infinity Partnerhip, that effort is already underway. The motivation for getting started early goes back to 2019, when the firm took the first wave of clients into MTD for VAT.

“There was a lot of last minute running around, choosing software… It doesn’t work,” said Houston.

To get ahead of the April 2022 deadline, Infinity has already moved the rest of its VAT clients into MTD. But ahead of the original 2023 implementation date for income tax reporting, “We took the view at end of the April 2021 tax year that we would start looking at this,” he explained.

“We went through the process last year of identifying each client and the form their records are held in. We’re now at the stage where when we hit the end of the next tax year, we can tell  them what they will need to do to comply and what are the benefits.”

The planning process covered which sectors the clients were involved in and the most suitable software options that would need to be put in place for them to comply. In most cases, this will involve moving clients onto an online Sage accounting platform.

“Staff all geared up for that,” he added. “So everybody can have that converstation. It’s going to be an effort for us all. By doing it now, we’ve given ourselves a two-year window to get to that in place.”

The firm had some pushback from clients who are reluctant to change their record-keeping systems, or who balk at the extra cost, but that hasn’t deterred Infinity from pressing ahead. “That’s no reason not to get ready,” said Houston.

This video is the second in a four-part series. You can access all of Sage's MTD resources and support on the Sage MTD Hub.

Sage

Replies (8)

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By Hugo Fair
03rd Dec 2021 15:54

There are 2 interesting extracts in this article - but neither of them expand on the detail.

1. “We went through the process last year of identifying each client and the form their records are held in. We’re now at the stage where when we hit the end of the next tax year, we can tell them what they will need to do to comply and what are the benefits.”
Benefits? No indication as to what these might be (in general or for specific clients)?

2. "The firm had some pushback from clients who are reluctant to change their record-keeping systems, or who balk at the extra cost, but that hasn’t deterred Infinity from pressing ahead."
But what about the impact on these clients (who neither wish to change their methodology nor to pay extra for the privilege of doing so)? Just toss them out the door?

Other than saying it's a good idea to know your clients and be able to categorise them (which is hardly a novel idea), I can't work out what the message is here?

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Replying to Hugo Fair:
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By Paul Crowley
03rd Dec 2021 16:02

Four MTD GOOD, two paper binders BAD
Appologies to Mr Orwell

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By Paul Crowley
03rd Dec 2021 16:05

VAT
This is not the unknown
It happened before
We should all know what needs to be done by now
Spreadsheets all organised for those that need it
Two letters being sorted for the digitally excluded
Those are the clients we do VAT for
A couple of clients doing their own thing that choose not to get me involved, but both have done all the VAT and wages themselves anyway so unlikely to panic at the last minute
One other is using Sage but refuses to join the MTD club until he really really must

MTD ITSA
Still the unknown
But good news
Non taxpayers are being included

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By bluebaron
03rd Dec 2021 16:37

Extra cost -is this the £6 per quarter / year that HMRC said it would cost..??!!

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By ireallyshouldknowthisbut
03rd Dec 2021 17:19

And the clients who have "pushed back" which I think is polite for raised their index finger and told you 'no' are you just throwing them in the bin?

if so where do they go to? ie if its not you, who will do their returns?

Moreover given the history of MTD and its perpetual delays, is it not very premature to force all clients onto software? I mean how do you know who to pick? Clearly HMRC will go soft on the £10k at the last minute, and landlords probably exempt. Local firm close to me did this 5 years ago and we have picked up a huge amount of work from them. They outright lied to clients and told them it was compulsory. Deeply unprofessional in my opinion to have forced unsuitable bookkeeping methods on a client.

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Replying to ireallyshouldknowthisbut:
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By Paul Crowley
03rd Dec 2021 18:46

Fairly certain some regular contributors have taken the "we do the bookkeeping or do not act" route
Rebecca B comes to mind
Given everything gets amended only at 11th hour by HMRC I will look to pushing only when there is a need, guaranteed. Even then when the disaster of non compliance by the unrepresented becomes apparent I could end up looking like a scaremonger
"The others got away with, I could have as well" I expect to hear for at least 2 years after the actual startpoint

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08th Dec 2021 12:17

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