Making Tax Digital: Q&A with PwC tax director Adrian Rudd

As part of a series of interviews on Making Tax Digital, Accountancy Age speaks to Adrian Rudd, tax director at PwC, about the digitalisation of the UK tax system

Making Tax Digital was removed from the Finance Bill in April ahead of the debate on the bill in the House of Commons. What does this mean for the digitalisation of tax?

I think that digital is the right direction of travel. I think the delay is an opportunity for the government to reflect on the timetable and the key thing for us is that they can make sure the project is thoroughly tested and piloted before it goes ahead.

Has the government carried out sufficient consultation on MTD?

I think that they’ve got to make sure the pilot process is very thorough, and all lessons from the pilot are taken into account and resolved before they go ahead with the project.

Do you believe the government’s estimated costs to be accurate? Do these costs pose a real threat to a small business’ survival?

Yes, I think that the costs are on the low side. But I don’t think many small businesses will close as a result of MTD.

Would you support a proposal which would see MTD first applying to businesses with the highest turnovers, and then filtering down to SMEs?

Not necessarily, because I think the challenges facing very large businesses and very small businesses are quite different and almost all large businesses – I can’t think of any that don’t – already adopt digital processes.

I think the key thing is that for all sizes of businesses there must be absolutely thorough testing and piloting before we go ahead and make MTD mandatory for any size of business.

Should businesses see MTD as an opportunity to improve their efficiency and embrace the digital world in which we operate?

I think they should, yes, because in our experience digitalisation of processes does enable businesses to operate more efficiently.

What can businesses with little digital experience do to adapt to the measures?

Well, I think they should talk to their advisers straight away and they should plan for MTD rather than leaving it for the last minute and sort of putting their heads in the sand. It is going to come and the more they’re prepared for it, the easier they’ll find it.

Do you think we’re still on track to become the most digitally advanced tax administration in the world by 2020?

No, I think the government’s timescale isn’t really realistic given the amount of work there is to be done to implement MTD.

What are the obstacles?

Just the volume of work. Getting software available for all the different types of business that use it and getting that thoroughly tested – I don’t think the timetable is realistic.

Interview by Alia Shoaib, reporter on Accountancy Age