A survey of tax professionals’ attitudes and company readiness for Making Tax Digital (MTD) for VAT shows that UK companies and accountants are lagging behind in their preparations and 70% are waiting for future announcements until they commit to a process, reports Accountancy Daily.
According to the survey, 70% of tax and accounting professionals stated that they had developed plans for adapting to MTD but had yet to start implementing the proposed changes. 37% said that they would employ a ‘wait and see’ attitude and hold off on changing policies until HMRC issues further guidance regarding the revised October 2019 deadline for ‘businesses with complex requirements’.
When asked about their biggest concerns over MTD, three quarters of respondents stated that issues about maintaining digital records and implementing software were foremost. Despite the possible advantages and future-proofing that software packages give against further digital tax requirements, 55% of accountants continue to use spreadsheets, and a third (34%) believe they will continue to use them to store VAT records. 62% of accountants reported that they still tracked VAT manually, despite 80% saying that they currently use the HMRC portal to submit VAT returns compared to 53% in the summer.
As was revealed in a recent House of Lords economic affairs committee hearing, HMRC’s position that agents should be the transmitters of knowledge regarding MTD was borne out by respondents to the survey – 40% of accountants said they were currently relying on technology partners to keep them informed about MTD, up from the 16% who said this was the case in summer 2018.
However, this information was not being spread within organisations, with 44% saying that MTD was being discussed at an ‘organisational level’ but they were not personally involved in making business changes.
Speaking to Accountancy Kim Hau, senior proposition manager for Onesource indirect tax at Thomson Reuters, said that the approach of the MTD deadline in April 2019 made this the perfect time for businesses to implement a complete rethink of their accounting processes rather than taking a ‘sticking plaster’ approach: ‘There are lots of solutions out there. Some are shorter-term solutions, and some are much longer-term solutions.