Dext CEO: Accountants can ‘get ahead of the game’ with MTD ITSA delay

The latest delay to the rollout of Making Tax Digital (MTD) for ITSA means that the accounting industry can better navigate the forthcoming changes amid challenging economic conditions, according to Sabby Gill, CEO of Dext.

“At a time of economic uncertainty, the decision to postpone major legislative change should help accountants, bookkeepers and their self-employed and landlord clients better navigate this challenging period,” Gill said.

In December, the UK government announced that the rollout date for MTD ITSA will be pushed back from April 2024 to April 2026. This is the fifth such delay the scheme has suffered, with the original launch date having been scheduled for 2018.

The fresh delay has seen a wave of frustration sweep across the industry, with many businesses and individuals having invested time and resources into achieving compliance by 2024.

But according to financial secretary to the Treasury, Victoria Atkins, the fresh delay will “maximise the benefits” of MTD ITSA.

“Smaller businesses in particular should be able to experience the benefits of increased digitalisation of Income Tax in a way which meets their needs,” she said in a statement accompanying the announcement.

While acknowledging accountants’ and bookkeepers’ frustration, Gill concurred with Atkins’ view.

“We understand the frustration that some may feel, given the efforts they’ve gone to in preparation. However, we’d like to express our support for the reasoning behind HMRC’s decision.”

Covering all bases

However, Gill went on to argue that “there’s still a lot of questions to be answered” by HMRC, criticising the lack of clarity around filing requirements.

This is reflected in a recent survey of tax professionals carried out by the Chartered Institute of Taxation (CIT) and the Association of Taxation Technicians (ATT).

The survey found that 94% are uncomfortable about taxpayers’ ability to comply, while 94% are uncomfortable with the level of taxpayer awareness.

Furthermore, 65% said they are uncomfortable about the availability of suitable software.

Similarly, Gill laments the challenge of building a MTD tech solution on the basis of the market’s current understanding of the requirements.

Dext has navigated this challenge by diversifying the capabilities of its software. The firm’s newly launched end-to-end MTD solution, Gill explains, will act as a comprehensive data extraction tool without being specifically tethered to the MTD requirements.

“One of the things that we had to do fairly early on was decouple our solution from the actual physical working with HMRC, because some of the rules were unclear.

“We said let’s at least make a solution that allows all of the key components of extraction, record keeping and reporting, and put all of that information together for a small business without necessarily creating it specifically for making tax digital.”

This broadening out of the product’s scope means that once HMRC has clarified the requirements, “that second compliance piece” will already be accounted for.

Finally, despite his diplomatic perspective on the latest delay to MTD ITSA, Gill went on to stress Dext’s preparedness irrespective of the legislative scenario.

“Whether or not the legislation comes in, we’ll have a tool that allows small businesses to be able to record and report all of that information.”