MTD has triggered a race for survival among accountants. Who will win?

MTD

If you’ve ever been exasperated with the service you’ve received from your bank then you’ll have some idea of what it’s been like to work with HMRC these last ten years. Painful.

Doesn’t matter if you ring, email, use an online service or send a fax (yes, really) customer experience has been lacking to say the least. I would be no exaggeration to say that the time it has taken to navigate fragmented HMRC departments must have cost the taxpayer and businesses billions over the years.

I think back to when HMRC made changes to the Flat Rate Scheme for VAT, they ‘insisted’ we wrote and posted a letter from every client to inform them of our client’s desire to leave the FRS. This meant we had to print, package and post over 1000 letters to HMRC to process.

Digitalisation has landed

But those days are over. Digitalisation is finally starting to course through the HMRC veins. And in my opinion, they’ve made a brilliant start by working on getting the basics of customer experience right.

Now as an individual taxpayer, Personal Tax Account (PTA) has provided me a near effortless experience. I can self-serve, when it’s convenient for me. There’s no jargon, it’s well designed and I don’t have to speak to anyone. Big tick.

The Business Tax Account is taking shape nicely too. It’s not quite perfect yet but HMRC has the right approach by asking for feedback at every opportunity to let customers shape the service.

MTD will test the mettle

The big test will come next month when Making Tax Digital (MTD) starts to go live with MTD for VAT. We will witness a watershed moment for accounting. There has been much fanfare about this. And it’s easy to see why because from April the majority of the accounting industry will be forced to catch up with the notion that you can submit VAT returns electronically via an HMRC API.

As far as we are concerned, VAT returns have been digital for a decade, and for our customers there will be no dramatic change. Our dev team has spent a couple of weeks talking to the helpful HMRC team, and about a week changing the code to allow us to plug into MTDfV. The customer experience doesn’t change – accounts are done in real time as normal, you click a button and the MTD magic will happen.

For thousands of other practices the story is very different and they will be under huge pressure to change years of ingrained manual process. This is where digitalisation of accounts and digital record keeping will hit most traditional firms hardest. It’s a case of adapt or die. Clients will vote with their feet, many have already started.

More AI on the horizon

MTD comes at a perfect time for us. Our ambition to deliver more automation and AI that helps people save time and get near perfect records with little effort can accelerate. That’s good news as less manual input means our accountants can set aside more time to help clients, and learn new skills that add more value to our customers’ businesses.

Accountant switch guarantee

The area I think will make a huge difference to business owners is the accounting equivalent of the ‘current account switch guarantee’. MTD allows people to move everything from their incumbent accountant to a new one within seven days. It’s possible because records will have to be accurate and up to date. And frankly that’s transformative for business owners and individuals.

There’s also no doubt that MTD will transform the accounting industry. HMRC is committed to a digital future and everything points to success. The race for survival is now on and it’s very clear that those practices that invest in digitalisation will be the winners.

Time to go digital

Whether you’re an existing client, looking for a hassle-free switch or simply want to brush up your knowledge – we’re here to make Making Tax Digital simple and provide you peace of mind. Preparing for digital tax starts with managing business accounts online. If you’re already using a competitive software like inniAccounts, the transition will be a smooth one. But if you’re making a change, it needn’t be a headache, MTD is a great opportunity to streamline your accounts and make your life easier with great software.

Learn how inniAccounts can help you with Making Tax Digital today.