Findings from a survey on Making Tax Digital (MTD) have revealed that 86% of respondents think that the UK government has made the right decision to delay its tax reforms.
The survey, conducted by Thomson Reuters at the end of July 2017, questioned 867 UK accountants what their views were on the deferral of MTD. The deferral was expected by 57% of respondents but 61% did agree that the digitisation of the tax system was the right approach.
When asked about quarterly reporting being changed to optional for businesses below the VAT registration threshold, 49% agreed that these businesses should be out of the quarterly scope. In contrast, 7% thought all businesses should be included by April 2010 and 13% agreed that they should be included, but with a phased approach.
Thomson Reuters tax product manager Mark Purdue said that MTD has just accelerated the pace of change for a more digital tax future. “Despite the changes to the MTD timetable, which are widely welcomed, many firms are choosing not to waste the time and effort they have already put into MTD and are continuing to make changes and seek out new technology to help them take on and benefit from the digital tax challenge,” Purdue said.
In terms of preparation for MTD, 48% admitted to have already begun, with the most popular steps being assessed software, assessed clients, internal staff meetings held on MTD, putting together an MTD strategy and reviewing the service offering. Seventy percent of those who have taken steps to prepare for MTD say that it has highlighted areas of focus for the future such as client training and adoption of new technologies. Thirty five percent are going to wait and revisit the requirements next year.
In contrast, only 29% think quarterly reporting offers efficiencies and 53% of accountants believe that it does not. Additionally, 63% think that quarterly reporting is inevitable for all businesses in the future. Purdue explained that quarterly reporting was the most controversial aspect of MTD and that no accountancy firm would increase its workload without payback and if quarterly reporting is inevitable for all businesses, adopting the right technologies is paramount to success.
Purdue concluded that being able to access near to real-time financial information will enable accountants to grow their practices and improve their advisory services. “What is positive is that MTD has encouraged and is still encouraging many firms to make changes – getting their clients to send in their books early, moving clients from paper to digital records, taking steps to streamline processes, review their own fee structures, and improve client education,” he said.