The introduction of Making Tax Digital (MTD) is set to have an unexpected effect on the UK’s accountancy sector - with many accountants admitting that they will miss filing traditional tax returns.
New research carried out by award-winning cloud accounting software company FreeAgent has revealed that more than a quarter (29%) of UK accountants say they will miss old-fashioned annual tax returns, which are due to be replaced with regular digital tax updates under MTD over the coming years. One in ten (10%) accountants said they haven’t yet decided whether they will mourn the demise of the tax return.
The poll comes on the heels of the introduction of MTD for VAT - the first wave of the government’s ambitious plan to digitise taxes for businesses. Under the legislation, VAT-registered businesses are required to keep digital tax records and make submissions using software to HMRC from April 2019.
FreeAgent also found that the majority of UK accountants are broadly in favour of MTD, with 56% of survey respondents saying they felt positive about the legislation, compared to only 19% who felt negatively about it. However, accountants were more evenly split about how MTD would impact them from day-to-day, with 34% saying it would make their work easier compared to 24% who said it would make their work more difficult.
The majority of accountants also said they thought it was important for their clients to understand MTD - although more than half (60%) admitted that their own clients did not currently have a complete understanding of the legislation.
Ed Molyneux, CEO and co-founder of FreeAgent, said: “MTD is one of the biggest changes to be made to the UK tax system in generations, so it’s perhaps unsurprising to see that accountants have split opinions about how the legislation will affect them. However, despite many worrying that it may make their work harder, it’s still positive to see that accountants are generally positive when it comes to MTD and think it’s important for their clients to understand it.
“Perhaps the most surprising revelation is just how many accountants are likely to mourn the death of the old annual tax return once MTD is fully implemented. While we know that completing and filing tax returns isn’t necessarily the most exciting part of accountancy work, it seems that this work still holds a strong emotional sway for many in the profession.”