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Tomorrow’s small tax practice is digital

15th Jul 2016
Tax Writer Taxwriter Ltd
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Rebecca Benneyworth gives her views of the future of the small tax practice.

This is the first of a series of reports from the ICAEW Tax Faculty Wyman debate held on 12 July, where four visions of the future were presented by top thinkers in the tax world.

Rebecca Benneyworth sees the future small tax practice doing everything digitally; making use of existing software tools, such as bank feeds, to capture clients’ transactions into accounting software. She said this could spell the end of the January tax return rush. By processing clients’ accounting information more in real time, advisers can give a different type of support to clients and not be slaving over hot spreadsheets late into the winter nights.

Nichola Ross Martin, asking from the audience, queried the reliability of such software, saying that advisers can waste a lot of time setting-up and reconciling bank feeds. This can make it uneconomical to charge fixed fees for tax compliance work.  

Benneyworth acknowledged that error-free software is essential for every tax practice. She cautioned against choosing the lowest common dominator of what is on offer, but also that tax advisers should not rely on free software provided by HMRC.

HMRC has stated its ambition to be the most digitally advanced tax authority in the world. Benneyworth said this as a great opportunity for tax advisers. She said: “We need to engage fully with the Making Tax Digital agenda, but we need to still oppose issues of detail where we consider that HMRC has taken a wrong turn.”

Benneyworth chairs HMRC’s Digital Advisory Group, which will enable HMRC to deliver that digital ambition, but that group will also have to highlight the areas where perhaps they have over-estimated taxpayers’ abilities. For example, just because the taxpayer has a mobile phone, it doesn’t mean he knows how to use a receipt capturing app. Tax advisers and accountants may find they need to provide technical support to certain clients to help with such issues.

Benneyworth’s key concern is: Can and will HMRC deliver to us (tax agents) the processes that allow us to provide digital tax services to clients? Benneyworth says we must remain engaged in the three-way conversation about this issue between: HMRC, tax agents and the software providers.

Benneyworth argued that there is a continuing need for sole practitioner tax practices such as hers. Clients deserve someone with the accountant’s skills and abilities. HMRC needs the accountant’s professionalism in dealing with small businesses, and the UK needs accountants to support small businesses to growth and to flourish.


What do you think? Are you digitising your practice for the future, or do you see problems ahead?

Replies (5)

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Tony Margaritelli, ICPA Chairman
By Tony Margaritelli
18th Jul 2016 07:51

Loved the part about error-free software and I wonder whether HMRC have consider this for themselves? apparently not judging by the problems with Marriage Allowance and Class 2 NIC. HMRC have ambitious ideas about all things digital and undoubtedly they are looking at agents to actually make it work judging by their past efforts. However, if they continue to put agents to the back of the queue while they make change after change they ought not to be too surprised if it doesn't go according to their plans. Tony Margaritelli - Chair ICPA

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By AnnAccountant
18th Jul 2016 18:25

Rebecca Cave's job = lifting quotes from Rebecca Benneyworth's writing and thinking.

Do your own thinking and writing.

Not that I expect AW pay much

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By coolmanwithbeard
19th Jul 2016 11:33

As a small independent I am trying to move towards this. In my view it will never work across the board as it's not just about ability but also time for clients.

Error free software - well it's often as good as the set up and input and I think we are expecting too much of it (particularly the scan in technology). Yes if we tell the system we buy fuel from Tesco we would need to correct a purchase of clothing it's not full AI it's excellent OCR.

Just my 2p worth


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By jonstewart
19th Jul 2016 12:34

The main issue that I see arising in relation to Making Tax Digital is training clients to accept it. At first I am expecting many to simply put their heads in the sand and ignore it, but this can only happen for so long.

The process and how it will apply to clients needs to be carefully thought through. The software in place to deal with this needs to be robust and fully tested before being unleashed on the public!

I for one will find it interesting to see how firms will be dealing with this, and taking a change of approach with clients in relation to their tax affairs. Given that some clients can't work to a 9 month deadline to provide tax return information, I do think some will struggle with an effective 3 month deadline! I suppose everything will be submitted without any need for them to get involved? We can but dream.

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By Pavilionaire
19th Jul 2016 12:40

I'm worried less about the software and more about HMRC's continued failure to "join itself up". Just this morning a mix-up over a 2015/16 Self-Assessment refund of voluntary Class 2 NI payments led to NICO revealing to me that a new client wasn't actually registered as self-employed at their end despite Self-Assessment Tax Returns with sole trader profit being filed for the last decade or more. That's potentially 17 qualifying years missed!

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