With the B words (Boris, Brexit) ‘topping’ the news agenda in just about every sector, it can be difficult to get a handle on what’s happening elsewhere.
For instance, in the realm of accounting, what’s going on with MTD? As you’d probably expect from a revolutionary dish that’s been tucked away on the backburner, it’s simmering nicely…
However, I did come across some interesting remarks by AAT tax policy expert Brian Palmer this week.
Evolution of the accountant
Live numerous observers, he sees MTD as the catalyst driving the evolution of the accountant role towards advisory.
“I have long said, and it is already happening, the accountant of the future will be a consultant,” he tells Accountancy Age.
“The days of the rear-view-mirror accountant, the ones that only deal with the production of end of year accounts and tax returns and numbers are over.
“The power of low-cost cloud-based accounting packages capable of delivering almost limitless reporting functionality in more or less real-time, using automatic data capture mean that those in business will demand timely in-year advice from their accountants.”
Further roll out of MTD
As usual, it would seem, HMRC isn’t helping as much as it could. “Agents can’t really plan ahead. Until HMRC is clear over the direction that any further roll-out of MTD might take, it would be like designing a solution to a moveable feast.
“My advice to agents at the moment is don’t focus on MTD. Instead focus on ensuring your clients get digitised. Whatever way you look at things, the future is digital.”
Brian says : “The conundrum which HMRC needs to solve, is ‘do we expand MTD for VAT by mandating the sub-£85,000s (the voluntarily registered), or do we revert to our original plans i.e start mandating the self-employed to onboard for income tax purposes by requiring them to file quarterly returns of their income and expenditure?’”
Required software
He believes mandating the voluntarily registered is best. “There are only in the region of 1.2m of them as opposed to a pool of over 3.5 million self-employed income tax filers, and the required software is already in place.”
“By encouraging micro and small businesses to use cloud-based packages, they will have access to sophisticated accounting and management information at a relatively low cost that, if relied upon, will give them a payback via a productivity bonus.”
Mandating the self-employed for income tax is also problematic. “HMRC would need to decide if it should return to it’s earlier proposal of mandating those with turnover above £85,000 first – this might be easiest as many in this cohort are already filing MTD-compliant VAT return.
“While there is a strong argument that all in business will benefit from easy to use software that offers rafts of added-value features at little or no additional cost it is likely that business membership organisation and lobby groups would be vocal in the opposition.
Brian concludes: “In my view the best approach is for HMRC to adopt a holistic approach to its roll-out of MTD and after a period of soft-consultation with interested parties (developers, agent bodies and membership organisations) publish a revised MTD road map to software developers, accountants and those in business, giving the certainty they all require.”
