Making Tax Digital is the biggest change to tax return compliance since Self-Assessment. Despite this, we know some things with a surprising degree of certainty.
For example, from past changes – such as RTI, iXBRL and Self-Assessment – we’ve learnt that the most important aspect of any change is not the technology involved, but the impact of new processes on clients, staff and the practice itself. Often, what marks out those who cope well with a change against those that struggle is how well they’ve prepared themselves for these process changes.
When it comes to MTD, we know from recent meetings that many of our customers have been doing their best to keep up with HMRC’s consultations; some have even been considering whether to get involved with the impending beta programme. No matter what your own degree of involvement, it’s clear that many questions remain unanswered and many details have yet to be settled.
But some things are certain already. For example:
- The (relatively) simple tax return process that you follow today will become more complicated with the introduction of quarterly reporting for business and property income over a certain level. Although you may not know exactly which clients are going to be affected (partly because thresholds have yet to be finalised) you know that many of them will be. As their advisor, you’ll need to agree with them whether they can do this themselves, or whether you’ll provide a service to support them.
- In the future you’ll no longer be collecting data from a single source (your clients). Instead, it will come from your clients, HMRC and other external data sources. Collecting and validating this data will create additional complexities to your processes.
For us at Wolters Kluwer, another certainty is that all our clients will be compliant for Making Tax Digital. Just as we already ensure you have the compliance updates each year, we’re fully committed to providing whatever tools and features you will need to support your clients under the new Making Tax Digital regime, with all core features available by April 2018.
Over the coming months, we’ll be exploring the subject of MTD in more detail, with particular emphasis on the practical steps that you can take now to prepare your practice, your staff and – perhaps most importantly – your clients for the transition.