How will Making Tax Digital transform the tax profession
Making Tax Digital (MTD) will affect businesses from 2018 and the changes will inevitably have an impact on tax professionals who assist their clients to keep appropriate financial records for their tax returns to HMRC.
While businesses of all sizes, plus the self-employed, are beginning to have an idea of what to expect under MTD, does the tax profession fully appreciate how it will be affected?
In November 2016 a panel of nine tax experts met to discuss a number of proposals following HMRC’s consultation documents. The debate was wide ranging and tackled some fundamental questions. Although it was accepted that the tax system has to embrace the digital age, the panel considered whether MTD was the best way to do this.
HMRC will expect businesses to use software or apps to keep and produce their quarterly reports, but the panel queried whether a mandatory approach was appropriate. As a profession, the tax experts were aware that some businesses do not have the infrastructure currently to adopt and adapt to keeping their records in a digital format.
In order to smooth the way to making MTD universally accepted and workable, the group discussed the key factors that HMRC has to put in place. The panel was asked if they considered that the current timeline was feasible and if it was relaxed how that would affect the credibility of MTD. The role of tax professionals as agents was also considered once MTD is live.