Making Tax Digital can be a game-changer for all
According to Accountancy Age, "With new legislation comes opportunity and there are a number of ways accountants can enhance the services they provide". You can read the original article here.
Making Tax Digital can be a game-changer for all
With the tinsel down and the sound of Auld Lang Syne firmly behind us, it’s time to look at what’s on the agenda for 2019 and it’s going to be a busy one. If it hasn’t already been on your to-do list – and it definitely should have been by now – it’s now less than 90 days until the first phase of the new Making Tax Digital (MTD) legislation comes into effect for VAT.
I’m sure that many of you have been working through transition periods with clients over the past few months, but worryingly, figures published by the House of Lords Economic Affairs Committee in December indicated that a full third of businesses are still unaware of the new legislation and haven’t assessed how they’re going to get their house in order. Whilst the legal requirements lie firmly with businesses to comply, I’m calling on accountancy professionals to help businesses better understand what’s required and get them over the line. Additionally, I want to highlight that with new legislation comes opportunity and there are a number of ways accountants can enhance the services they provide.
First off, let’s address the elephant in the room. The majority of articles I’ve read in the media about MTD fail to address its imperative advantages – with scores of criticisms focused on the process and timelines. The reality of the situation, however, is that this is happening and stalling the process is only going to delay the inevitable. The deadline is getting closer and we need to get everyone on board by explaining how it’s going to help their business.
So, how will MTD help? Well, aside from creating a new standard for record-keeping, it’s an integral part of the digital world that is driving fundamental change in how we work across all business sectors.
Today we’re ‘always-on’ and companies now expect the same level of responsiveness from their suppliers that they offer their own customers. The demand for real-time insights into their business means accountants (as readers will be well aware) are needing to work harder than ever to deliver a first-rate digital experience.
Firms that are thriving are the ones that work with their clients to deliver personalised services via the client’s chosen method. This could be leveraging everything from social media to video chat to new apps – all made possible by both parties having access to the business data anytime, anywhere. According to QuickBooks, 89% of businesses thrive when they have accountancy support and increased digitization and automation of traditional bookkeeping tasks through software will allow accountants to offer value-add consultancy.
Already, clunky spreadsheets are being replaced by online software designed for purpose and enabling accountants to focus on strategic ways to add value to clients’ businesses. With data easily and readily available, MTD is going to help to streamline processes even further, freeing you up to spend more time being an advisor rather than simply tidying up financial records.
It’s in line with what customers expect, too: 69 percent of UK SMEs are now using cloud-based applications according to the British Chamber of Commerce, and they expect to work with advisors who are using the same tools and taking similar approaches.
I fully understand that with change comes uncertainty and despite many of us growing up with technology, there can still a resistance to fully embracing it in our business.
However, by embracing MTD you are not only future-proofing your clients’ businesses by providing real-time analysis reports, being able to review a business’s funding options and implementing accurate forecasting, but you are securing your own too by seeking out new revenue opportunities and providing clients with invaluable services.
We need to remember that MTD is only one of a slew of digital changes coming our way and keeping up with legislation is expected if you want to stay competitive. The trick is not to be intimidated. Talk to your software providers, take up any training or workshop offers and embrace the new world.
MTD will create a de-facto business standard and help businesses to ‘bullet-proof’ their operations in the midst of political uncertainty. Let’s work together to help them grow and prosper. Their contribution to our economy is vital and by adopting new standards and best practices, we can create a level playing field, enabling them to compete on a global scale.
This article was written by Carl Reader, the founder of the #BeYourOwnBoss movement and chairman of business advisory firm d&t, which has over 2,500 clients in the UK
As a reminder, Powered Now is MTD ready. You can submit your VAT returns and connect to HMRC. Powered Now is easy to use and works on your mobile, tablet, Mac and PC. To arrange a free demo to learn how easy your VAT return could be just get in touch.