Article by Alex Davis
I was recently invited to an intimate round table discussion with Ed Troup – First Permanent Secretary for the HMRC. Ed is very closely involved with the plans for MTD and the purpose of the session was to get feedback from select people about the government’s intentions.
Firstly, I wanted to thank Broomfield Alexander and the South Wales Chamber for the invite, it was certainly a lively discussion and there was diverse representation from business, software vendors, local government and advisors. There were 3 key take-aways for me:
- Businesses ‘get it’. Whilst there has been a lot of discussion from accountants and advisors about the potentially negative impact of MTD, this was one of the first times I have seen the reaction from businesses. As an example, one small business owner started the discussions with some fairly negative (and honest) views on HMRC and ended the session pleased that he came and excited about the prospect of a new digital world. He did however comment that he needed to get a new accountant.
- The focus should be on what we do know … not what we don’t. There were a number of comments about the uncertainties – partial exemption, complex partnerships, penalties – but 2 overarching principles were clear, data must be digital and it needs to be shared easily and regularly. At that point, Ed Troup looked to the software providers around the table and said ‘that’s where you come in’. Yes, there are potential concessions over spreadsheets but that seems to be a sticking plaster, not a solution.
- The runway needs to be as long as possible. One thing that did disappoint me from the session was the clear lack of awareness from businesses. But then again…. why should they know? The responsibility has been purely on accountants and advisors to spread the word. One of the accountancy firms in the room had completely changed their workflows and now refuse to work with clients that will not use cloud software. If MTD is to be launched properly then there is a huge amount of work needed to change behaviours, staffing structures, client mindset and software tools. This takes time. Mr Troup did say however that they will look to accelerate plans to communicate the changes to small business.
So, despite the session being very interesting, my views have not really changed. The government is fully committed to the program, businesses like the idea but need help, proactive accountants will prosper and those that wait and see will lose.
To download our latest MTD planning tool please click here or if you would like some tools to help you communicate with clients on this subject, drop me a connection request or message.