Marketing manager
In association with
Share this content

Adopt the right tools to prepare for the inevitable MTD rollout

Now accountants have seen off tax season for another year, there is no better time to wrestle with the ever-looming inevitability of MTD and kick off their clients’ digital workflows with data expenses capture.

24th Feb 2020
Marketing manager
In association with
Share this content
Receipt capture

Accountants are continuously grappling with short-term compliance changes. In the first few months of 2020, it is the new off-payroll rules that are at the top of the accountants’ agenda.

However, it is important to avoid falling into the trap of trying to get over the next compliance hurdle without spending enough time to think strategically.

Designing an adaptable compliance engine that can cope with all clients and situations gives practices an important strategic advantage against those that only focus on the short term, adding new solutions as they go, and more often than not, ending up with a rickety infrastructure that is not ready for the future.

After self assessment season, accountants can now finally dedicate time to think about their practices, improve their workflows and adopt the right tools that will allow them to improve their internal processes.

According to Mark Purdue, product manager tax products at Thomson Reuters, firms should be preparing for the medium to long-term implications of Making Tax Digital, in particular looking for the tools to prepare for the inevitable MTD for income tax rollout.

“I think we all have to accept that MTD for income tax is coming, and potentially will be with us in just over a year from now,” said Purdue.

“MTD will present two large challenges for an accountant: how to digitise a paper-based client and how to improve workflow efficiency when there is only a 30-day window from period end to make the quarterly submission”.

Starting the digital process

Beginning with the expenses input is an obvious first step to create a fully digital workflow. By scanning receipts and sharing transactions online with their accountant, clients start a paperless flow of information.

For the accountant, these tools mean improved collaboration and less time wasted chasing clients. In particular, apps that link to cloud systems – reducing admin time – are becoming one of the most widely adopted tools by accounting firms and their clients.

“From a practical point of view, it makes sense if clients are willing to take expense processing software on board,” said Glover Stanbury consultant Kevin Salter. “Where the problem comes, and I've seen it very often, is that most products do expenses and purchase invoices and quite often people get confused.

“They will say something like ‘I put it in manually and it hasn't appeared’ or ‘Isn't the expenses the purchase invoice?’ To us it’s easy, but to them, it doesn't always seem to fall in place and click.”

Smaller clients in particular are having difficulties finding more basic capturing tools that will share the data with their accountants every quarter.

“We do try and use something different for them, for the basic expenses that they are going to reimburse and mileage when they are out and about,” said Salter. “There are always new entrants into the marketplace, and some of them will appeal to many small businesses because they are taking out that hassle of having separate processing and accounts software.”

But besides being essential for MTD, real-time data collection also gives accountants and clients a more strategic and holistic view for the future of their businesses.

“The government’s new digital tax accounts bring together each taxpayer’s details in one place, just like an online bank account,” said Purdue. “Taxpayers can view their tax affairs in real-time, update their information, register for news services, see at a glance how their tax is calculated and more.

“This real-time data is going to be helpful for planning purposes, and the introduction of these digital tax accounts is a real opportunity to change how everyone works.”

OnBalance Self-Employed is Thomson Reuters' new mobile receipt capture tool for small clients who don’t need the complexity of invoicing or VAT.