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matt flanagan

Practical practice planning for MTD

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18th Mar 2019
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What does good Making Tax Digital planning look like? Matt Flanagan, managing director of BlueHub, outlined some of the key considerations in an event aimed at supporting small to mid-sized accounting firms to make the digital transition.

Be ready for questions – lots of them – and work out how you’ll answer them. This is one of the key pieces of internal preparation you need to do, said Flanagan.

“If people go to file a VAT return and either they can’t log in or can’t get their filing through, they’ll try contacting HMRC. But HMRC has limited resources and can’t answer everybody. The next call they make will be to you! Expect an avalanche of queries when the programme ramps up.”

Second, work out how much work you’ll have to do to prepare existing clients for MTD – and who will be doing it. Understand how many clients are affected by MTD and how many are already compliant. Then work out your conversion rate, starting with the time you have available, he said.

“For example, if you have three months left to convert them and 40 clients requiring conversion, that’s 13 you’ll need to convert every month.”

Then compare this to your current conversion rate to work out if you’ll need to speed up to get through them all before filing begins in earnest in August. Consider the capacity you currently have available and keep in mind that the average time it takes to convert a client is between eight and 11 hours.

Bear in mind that it may not just be existing clients you’ll be converting in the coming months, said Flanagan. You could also be assisting new clients - some of the half-million businesses who will be looking to sign up with MTD-compliant firms.

When it comes to which cloud software you should offer, it’s sensible to have a default platform, he said. With each platform releasing some 2,000 new features a year, that’s 8,000 new releases for the four most popular platforms alone.

“It’s best to become a master of one platform. If you get a client who wants to go with a different vendor, that’s your choice. But it’s only going to get more complicated in the future with even more software coming onto the market.”

To carry out the conversion process on behalf of clients, consider having two different price points. A standard conversion could include one-to-many training for £250 while a managed conversion could be more bespoke, one-on-one training for a single team for £1,500.

“Too many firms are giving this away for free and getting stuck in the conversion process. If you don’t place a value on it, the client won’t place a value on it,” he said.

Be mindful of being dragged into software support post-conversion. Come up with three different MTD support packages at different price points. Putting a price on support will encourage clients to self-regulate. They should then only contact you with accounting queries and not questions about the software, which could be answered by vendors.

In summary, Flanagan outlined six key indicators for tracking your progress. They included understanding your current position, picking a platform, profiling your list of clients and drawing up plans for engagement and implantation.

Taken from the AccountingWEB Presents event in London, watch QuickBooks’ Customer Trainer Richael O'Brien demonstrate two MTD for VAT solutions – eFiling and Bridging Software. Showcasing their differences, she shows how both ways are compliant and simple to submit to HMRC for MTD. View the full videos here.

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