SEPTEMBER 2019 | 43
Business
Read online at www.proinstaller.co.uk
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
’
What is the impact
likely to be?
The impact is likely to be a lot
of complaining, followed by the
widespread adoption of computer
software to help run businesses.
Unfortunately, the reality is that
getting businesses to adopt new
approaches is hard.
The problem with MTD for VAT
was that only tens of thousands
of companies were involved 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 program 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 communicated compul-
sory 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 aban-
doned, about the only thing that
you can say for certain about MTD
is that software companies are
going to do well!
About the author
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 businesses to come onboard
’
When will MTD for profit
and loss arrive?
The Making Tax Digital pro-
gram 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
businesses 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 delays once both MTD for
VAT and Brexit have passed. MTD
has already suffered from the di-
version 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
dominated the discussions. But
it was interesting to see the com-
ments that came back when one
accountant recently stated that
they were thinking of non-com-
plying. 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 clients 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