MTD: A chance for accountants to show their worth

MTD: A chance for accountants to show their worth

The upcoming MTD for income tax self-assessment deadline opens the door for accountants to play a key advisory role once more 

MTD: A chance for accountants to show their worth

Making Tax Digital (MTD) deadlines provide another opportunity for accountants to “lead the charge,” says co-founder of Mazuma Money, Lucy Cohen.     

Accountants played such a vital role during the pandemic, offering invaluable advice to their clients on how to stay afloat during unsettling times. With many businesses unsure of what to expect from MTD ITSA, accountants can play this facilitating role once again.   

A recent study by Tommys Tax, a tax refund app, reports that 45% of the British public are unaware of MTD deadlines, leaving many business owners unprepared and at risk of facing hefty fines due to non-compliance.    

“I’m surprised that it’s that low [45%] to be honest,” Cohen adds.  

According to data compiled by tax solutions provider, Avalara, around 832,000 businesses still remain unregistered for MTD for VAT    

 Cohen believes the messaging from HMRC should be “go and find an advisor” because the transition to MTD is challenging for many SMEs.   

Fraser Campbell, partner and UK head of accounts and business advisory services at Azets, agrees, saying that it’s up to accountants to “make [MTD] as painless as possible” for clients and ensure they remain on the “right side” from a compliance perspective.    

To help businesses become better informed about MTD, Cambell says “I’m aware that the HMRC are planning an awareness campaign in the new year to start to build MTD for ITSA.” Cambell urges the Revenue to use the campaign to highlight timeframes and key requirements for businesses.   

‘Change is hard’  

The workload for an accountant has increased since MTD was first introduced. Cohen says conversations about increased prices have had to occur because they are now doing “five times the work for a sole trader”.  

“We as a profession must be so much better at selling ourselves and having that value proposition, and this is [MTD] the perfect opportunity to do it,” she adds.   

“There is a reticence and a reluctance” to having discussions regarding “sensitive” topics like pricing because “change is hard”.  

There is a degree of trepidation regarding MTD among businesses with there being a surge in “taxpayer apathy when it comes to being receptive to messages from the government,” says Cohen.   

“We’ve had so many changes to tax […] that no one’s listening anymore.”        

According to Campbell, “it’s up to us in the profession to turn it into a positive [for clients]” and once the industry is through the “initial teething problems” clients will see the benefits.    

MTD will supply the tools for businesses to acquire better information in terms of how they are performing, allowing them to make more informed decisions, he adds.   

MTD ITSA will be introduced in April 2024, and looks to build on MTD for VAT which was extended to all UK VAT registered businesses on April 1 2022.      

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