- New research from FreeAgent reveals that accountants are polarised about how the forthcoming Making Tax Digital (MTD) initiative will affect their day-to-day work
- More than a third of accountants (39%) expect MTD to make their work harder
- 41% believe that MTD will have a negative impact on their clients
- However, most remain positive about the legislation in general - with nearly two-thirds (62%) believing that MTD will lead to new growth opportunities for their practices
UK accountants are polarised about how the government’s forthcoming digital tax agenda will impact their day-to-day work, despite being widely positive about the legislation in general - new research has uncovered.
Under the forthcoming Making Tax Digital (MTD) legislation, UK businesses earning above the annual VAT threshold of £85,000 will have to keep digital records and file quarterly VAT updates to HMRC through digital software from April 1st 2019.
However, a survey of accountants carried out by cloud accounting software provider FreeAgent has revealed rifts in opinion about how MTD could affect both accountancy practices and the clients they work with in the future.
The poll of accountants working with small businesses and freelancers, showed that 39% of respondents said that they thought the introduction of MTD would make their work harder, while 34% said they believed the exact opposite would happen and it would make their work easier. In a similar split, 41% of respondents said they thought MTD would have a negative impact on their clients, while 35% said they believed it would actually have a positive impact on them.
However, the survey revealed that opinions are less polarised around other aspects of the MTD agenda - with 58% of respondents said that they believed providing quarterly updates to HMRC as part of Making Tax Digital would help their clients have better visibility over their business health. In addition, nearly two thirds (62%) said they thought that MTD would lead to new opportunities for growth at their practices.
Ed Molyneux, CEO and co-founder of FreeAgent, said that the survey showed the accountancy sector was becoming more accepting and positive about the prospect of digital tax - although some accountants still remained sceptical about the day-to-day impact of the legislation.
He said: “With just under a year to go until MTD for VAT comes into effect, it’s clear that - while the accountancy profession is starting to look in earnest at the potential benefits and opportunities that digital tax will bring - there is still some way to go before all of their concerns are fully addressed.
“We’ve found that some accountants still fear that MTD will increase their workloads and that it will be difficult for their clients to deal with. But it’s also positive to see a more unified opinion forming about the wider, more general benefits of MTD - with the majority believing it will be beneficial for their clients in the long-term, and could be a potential boost for practice growth.
“With software vendors currently testing their filing capabilities for MTD for VAT, and more information about the legislation expected to be released during the run up to the implementation deadline, I expect accountants to become even more engaged and positive about digital tax before next April.”