HMRC’s 2 May announcement that it was delaying some of the elements in its Making Tax Digital (MTD) overhaul should not blind accountants to the underlying direction of movement, according to tax lecturer Rebecca Benneyworth.
All told, HMRC has just under 300 transformation projects on the go, but the tax department opted to scale back their efforts on all these fronts so it could concentrate on adapting its systems to the new trading and taxation arrangements that will come into force when the UK leaves the European Union in March next year.
While some AccountingWEB members have likened MTD to watching a car crash in slow motion and cast doubts that HMRC’s digital vision will ever come to pass, Benneyworth is pressing ahead with her own plans to go digital.
“It takes time to get things right and we should applaud HMRC for listening to representations from the ICAEW and other bodies and opting to do just that. Now MTD won’t happen until it’s ready,” she said.
According to Benneyworth, the biggest challenge of MTD was not the requirement to file quarterly submissions, but getting clients to keep the digital records needed to feed HMRC’s online system. The leap will be a big one for small businesses who still use paper books, spreadsheets or merely pass all their invoices and receipts to their accountant to work up.
Looking at the time and effort needed to make that switch, Benneyworth decided like many other accountants to move all her clients onto cloud bookkeeping.
“That will allow me to reap the benefits,” she said. “When MTD comes, I will be ready because I will have access to all my clients’ records.”
One project that is proceeding as planned is MTD for VAT, which is scheduled to go live next April. As part of her preparations, Benneyworth has agreed to take part in the pre-launch pilot scheme but is still waiting for the technical infrastructure work and formal guidance to be completed.
Find out how Rebecca Benneyworth’s preparations for Making Tax Digital are proceeding in the Accounting Excellence Talk with Intuit QuickBooks and HMRC at 11am on Thursday 17 May.
About John Stokdyk
John Stokdyk is the global editor of AccountingWEB UK and AccountingWEB.com.