NOVEMBER 2019 | 45
Business
Read online at www.proinstaller.co.uk
When will MTD for profit
and loss arrive?
er software to help run busi-
nesses. Unfortunately, the reality
is that getting businesses to
adopt new approaches is hard.
The problem with MTD for
VAT was that only tens of thou-
sands of companies were in-
volved in the pilot and nearly a
million are having to adopt MTD
in a three-month period. That is
a recipe for disaster. At the same
time, the communication pro-
gram to tell people about MTD
was far too low key.
The way this should have
been done was to have an initial
pilot, as was done. But then
to have heavily communicat-
ed compulsory adoption on a
rolling basis, for instance by
company name in alphabetic
order. HMRC could then have
controlled the speed of adoption
over time.
In comparison with MTD for
VAT, GDPR had a huge amount
of publicity and a lot of resultant
fear. You could say that this was
bad, but the good news was that
it got taken seriously. In contrast,
HMRC has emphasised a light
touch to enforcement of MTD
which simply encourages procras-
tination. Since we will all have to
comply eventually, it’s less work to
do it once and to do it properly.
Given the approach being taken
to MTD for VAT, it has to be said
that full adoption of MTD is likely to
go on over a period of several more
years. But as the CEO of a software
company that may well benefit from
MTD, you should treat my words
with a degree of cynicism. Unless
MTD is abandoned, about the only
thing that you can say for certain
about MTD is that software compa-
nies are going to do well!
The Making Tax Digital program
has already been delayed several
times and the delays have already
added up to years. At the time
of writing, MTD for VAT is being
implemented, but there are still
hundreds of thousands of busi-
nesses to come onboard.
Because of the slowness of the
MTD for VAT rollout, HMRC made
a last-minute compromise by
allowing “bridging software”. This
allowed data to be put into MTD
in a similar way to the current web
form. HMRC will need to disallow
this to get the full benefit of MTD
for VAT but with many companies
opting for this approach, there
is actually still a major adoption
curve to come. The truth is that
MTD with bridging software is
MINO – MTD in name only.
Because of delays with MTD for
VAT, MTD for profit and loss has
been delayed. This seems sensible
and we will probably have a better
idea whether there will be further
About the author
delays once both MTD for VAT
and Brexit have passed. MTD has
already suffered from the diver-
sion of resources to Brexit.
So, the answer to the question
of dates is that MTD for profit and
loss will arrive by 2021 “at the
earliest”.
The attitude of the
accounting profession
I regularly read comments on
accountant’s forums discussing
Making Tax Digital. It has been
amazing how negative many of
them are. I guess that this illus-
trates how much resistance there
is to change. Naysayers have dom-
inated the discussions. But it was
interesting to see the comments
that came back when one account-
ant recently stated that they were
thinking of non-complying. That is
because so many people had said
how difficult it was. Following this
there was a flurry of accountants
saying that they had got their cli-
ents up and running on MTD for
VAT with no problems.
Benjamin Dyer is CEO and
co-founder of Powered
Now. Powered Now’s mobile
app aims to take the pain
out of paperwork for elec-
tricians, gas engineers and
builders as well as other
trade businesses.
In summary
Computerising business records
and tax returns has got to be
good news if we want rising
standards of living, which in turn
depend on improving business
efficiency.
However, there are a number
of mountains to climb before
everything is fully up and
running. HMRC have not really
distinguished themselves with the
professionalism of the programme
so far. Here’s to hoping that they
will do better in the future and
that we can all eventually prosper
as a result.
www.powerednow.com