#Making Tax Digital. Anyone ready?
#Makingtaxdigital, is the HMRC hashtag of the moment. Quick search on Twitter brings up links to key facts and the time line for the imminent changes to how HMRC, accountants and tax payers will interact, exchange information and keep all records on compatible software.
Join the Twitter debate and you’ll soon become embroiled in negative discussions surrounding HMRC’s ability to deliver digital change on time.
Online rumours abound that HMRC isn’t capable of overhauling the system smoothly. Current doubts are based on past mistakes by HMRC and announcements regarding delays to ‘digital change’.
Many fear it will be the ordinary tax payers that will ‘pay the penalty’ of rushed and incompetent implementation.
I wouldn’t be so quick to question HMRC’s abilities to overcome the huge challenge of going digital. ‘Making tax digital’ isn’t a new concept for HMRC. It’s yet another step on the HMRC digital journey initiated a number of years ago when HMRC started communicating in Real Time, digitally and online filing.
HMRC has just confirmed the start dates are set in stone and worth adding to your work diary:
- April 2018 for income tax reporting
- April 2019 for VAT reporting
- April 2020 for corporation tax reporting (and, following the consultations, income tax reporting for partnerships with turnover exceeding £10m).
Who else is to blame for confusing tax payers?
Accountants are also to blame for the delays. Yes, I myself an accountant really did say that.
At an IRIS conference, I attended it was announced that around 60% of UK accountants have failed to embrace digital change. A staggering figure that highlights the risk to thousands and thousands of UK business owners and individual tax payers that will fail to communicate digitally with HMRC. In turn the taxpayers left behind will risk hefty fines and penalties.
It’s a mystery to me why so many accountants aren’t digitally ready. The marketplace is swamped with the latest accountancy software compatible with HMRC, pension regulators and banking systems.
Every accountant owes their clients a duty of care to be ready for the digital transition.
Here are 3 easy steps every accountant ought to follow to support clients.
- Step 1 – Invest in latest online accounting software
- Step 2 – Tell clients change is coming and date they will be affected from
- Step 3 – Exchange client information with HMRC on time and accurately
Word of warning. HMRC has always and will always expect you to take responsibility for paying your tax on time. The difference is, in the future you will have to communicate more often and via digital tools that are compatible with HMRC digital systems.
Take the stress out of going digital and talk to an accountant that is digitally ready.
Get in touch by email on email@example.com or call 0141 290 0262 or @simonmurrison
Simon Murrison, CA
Business Expert, Murrison & Wilson