MTD – yes please, but with major caveats

MTD - yes please, but with major caveats

The drive towards a fully digital tax regime is an admirable one, but mandation is simply wrong, according to one of the UK's most senior tax technology practitioners - Paul Aplin

WHAT STRUCK ME about yesterday morning’s Treasury Select Committee session on Making Tax Digital (MTD) was the degree to which the witnesses agreed.

Rebecca Benneyworth, Frank Haskew, Chas Roy-Chowdhury and Mike Cherry all supported steps to harness digital to improve tax administration. But they also urged caution over the timetable, spoke out against mandation (suggesting an exemption level no lower than the VAT threshold) and raised doubts about the purported additional tax yield and claims that MTD would reduce costs for businesses. They highlighted the difference between transitional and ongoing costs.

These were not pleas to scrap MTD – but to get it right.

Over the past twenty years my firm has helped HMRC beta-test most new digital services for agents. We have done it because we see a clear business case both for us and for our clients. I sat on HMRC’s Carter Project Board and now sit on the Digital Advisory Group.

You would expect me to be all for MTD. I am.

I am very enthusiastic about the potential it holds, but I share the concerns articulated so clearly by this morning’s TSC witnesses.

Small businesses can do without yet another administrative burden. They have enough to contend with already.

Mandating MTD for such businesses is simply the wrong approach.

It is time to accept that fact, then agree a sensible level below which participation is voluntary and finally harness the genuine goodwill that exists across the professional and trade representative bodies to work together with HMRC and the software industry to build something that delivers clear benefits for all; a system small businesses will choose to adopt.

Paul Aplin OBE is a partner at AC Mole & Sons, and ICAEW vice-president. He sits on HMRC’s Admin Burdens Advisory Board & Digital Advisory Group. Aplin won the Outstanding Contribution Award at the 2013 British Accountancy Awards  

Share

Subscribe to get your daily business insights

Resources & Whitepapers

Why Professional Services Firms Should Ditch Folders and Embrace Metadata

Professional Services Why Professional Services Firms Should Ditch Folders and Embrace Metadata

3y

Why Professional Services Firms Should Ditch Folde...

In the past decade, the professional services industry has transformed significantly. Digital disruptions, increased competition, and changing market ...

View resource
2 Vital keys to Remaining Competitive for Professional Services Firms

2 Vital keys to Remaining Competitive for Professional Services Firms

3y

2 Vital keys to Remaining Competitive for Professi...

In recent months, professional services firms are facing more pressure than ever to deliver value to clients. Often, clients look at the firms own inf...

View resource
Turn Accounts Payable into a value-engine

Accounting Firms Turn Accounts Payable into a value-engine

3y

Turn Accounts Payable into a value-engine

In a world of instant results and automated workloads, the potential for AP to drive insights and transform results is enormous. But, if you’re still ...

View resource
Digital Links: A guide to MTD in 2021

Making Tax Digital Digital Links: A guide to MTD in 2021

3y

Digital Links: A guide to MTD in 2021

The first phase of Making Tax Digital (MTD) saw the requirement for the digital submission of the VAT Return using compliant software. That’s now behi...

View resource