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.
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.