The first MTD filing deadline created a headache for overstretched accountants, with new quarterly reporting rules contributing to already rising workloads.
The 31 January tax return self assessment deadline brings with it clients arriving with receipts, endless phone calls chasing paperwork, and long days and weekends trying to get everything over the line.
But all that is changing. In August, self-employed taxpayers, landlords and their accountants submitted their first quarterly updates under Making Tax Digital (MTD) for Income Tax, marking the start of a new reporting rhythm for the profession.
Do we now run the risk of turning one ITR season into four?
You may well be overstretched and will now find yourself juggling four reporting cycles a year – alongside payroll deadlines, VAT returns, year-end accounts, company filings and helping clients with other matters such as running the business.
A change forever
Now, it’s important to say that this isn’t an argument against Making Tax Digital itself.
Few people would disagree that the tax system needed modernising, and encouraging businesses to keep digital records throughout the year should ultimately reduce errors, improve the quality of information reaching HMRC and help taxpayers build a clearer picture of what profit they make and how much tax they owe.
BUT the profession is being asked to implement this change at a time when capacity is already stretched. Recruitment remains one of the biggest challenges facing accountancy firms. Experienced professionals are increasingly difficult to find and clients expect far more than simply having a tax return submitted once a year.
Today, you are advisers, business partners and problem-solvers, often supporting clients through everything from cash flow challenges to succession planning, while continuing to deliver the compliance work that keeps businesses on the right side of HMRC.
Advisory conversations are becoming more frequent, as many SMEs are navigating higher employment costs with the increases to employer National Insurance contributions and rises to the national minimum wage. That’s all the while set against the backdrop of the wider economic uncertainty challenging so many sectors at present.
Pressing the submit button is the easy part
Clients aren’t suddenly going to become perfectly organised because HMRC has introduced a new reporting timetable, and there will inevitably be a bedding-in period while businesses adapt to keeping digital records throughout the year rather than scrambling to pull everything together in January.
Those businesses that embrace that mindset will almost certainly find quarterly reporting becomes far less burdensome over time.
With thanks to Croner’s Business and Accountancy Daily and Louise Walpole, Commercial Director at Advancetrack.
(A personal view from the SPA Editor: Is this the start of moving to AI?)
