Phew! After seven exhausting weeks, now that the general election is finally over and May’s wager to improve her parliamentary majority has failed dramatically, we can talk about one of the issues important to accountants.
Making Tax Digital
Not only do we have a hung parliament, but incidentally, Finance Secretary & MP Jane Ellison – the day-to-day lead for Making Tax Digital – has lost her seat in Battersea!
It’s not clear how her demise will affect MTD, but we have no doubt that a period of uncertainty will continue until a new minister is appointed and Brexit negotiations are well under way.
With the Conservative Party expected to from a minority government with Northern Ireland’s Democratic Unionist Party (DUP), we don’t think there will be enough time to devote to MTD in the next Finance bill.
According to AccountingWeb’s coverage of how accountants reacted to the Election, the only way for MTD to progress is for Theresa May to opt for a continuity strategy and retain her best team as best as she can. This seems highly unlikely.
Despite all the contradictions in the news, we expect MTD to proceed, albeit with some delays. If you are an owner of an unincorporated business, due to come into the regime from April 2018, you might be wondering whether you should make MTD a low priority. We think that you should continue to prepare as planned and not count on this.
The delay is good from HMRCs perspective. It gives them time for a longer pilot and also provides time to software developers to build, trail and test their MTD systems. For many accountants, the delay might be a good scenario too as it gives them and their clients more time to train and prepare.
However, this will not change QXAS’ strategy to help its accounting clients move their clients onto a cloud accounting platform by 2018. We say this because in our view the benefits of moving your clients to the cloud are massive.
The digital age is here. Maybe the timeline is a little contentious but don’t stop preparing. To be in a better position when MTD walks through the door, consider:
- how MTD will affect pricing structures
- how you will deliver the service
- what software you will need
- how you will prepare your staff and clients
- what software training you, your staff and clients will need
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