The launch of Making Tax Digital (MTD) is fast approaching and its detractors have a few complaints to work with; they worry the quarterly tax reports will take more time than the current annual return or that it’ll be expensive to implement a whole new accounting system. By far the biggest fear for many, though, is the digital element itself.
If you have some technologically-challenged clients who’re still desperately clinging to their shoebox full of receipts or some who think their Excel spreadsheet represents the latest in accounting technology, you may have a tough time ahead as you help them prepare to go fully digital with their finances.
The good news is that once they have everything in place they’ll quickly appreciate just how much easier MTD is going to make running their business. Quarterly reports sound like more effort but the upside is that it’ll be much easier to calculate and plan for tax responsibilities and they’ll completely eliminate the January self-assessment deadline panic.
Automation dramatically reduces the risk of errors sneaking into your clients’ accounts and makes it easier for you both to log and claim business expenses. With the new system, you’ll all know exactly where your clients are with their finances all through the year which will be a huge boost to business efficiency and productivity.
The tricky part is getting your clients to understand the potential benefits when all they can see are the complications. As their accountant, you’re perfectly placed to help turn your clients from technophobes to techno-fans.
Consider hosting a workshop or a webinar in which you walk your digitally-challenged clients through the process of setting their accounts up for MTD compliance.
The problem for many of them will be a simple fear of the unknown so you can use your knowledge to break everything down into easy-to-implement steps that will help demystify the whole process of going digital.
Alternatively, you could consider launching a paid service where you work one-to-one with your clients, advising and setting everything up so that they’re ready to go.
Some people will just need a little reassurance that it’s not going to be as complicated and scary as they may be anticipating and it’s never too early to start. Be proactive in discussing MTD with your clients and help them formulate a schedule that will help them make the changes they need to make in good time.
Remind them too that you aren’t going to abandon them after the implementation of MTD; you’ll continue working together to make sure their accounts are error-free and totally compliant, so they really don’t need to worry unduly.
Not all accounting software is created equal and digital-novices will find some easier to use than others. It would be massively helpful to your clients if you could recommend a software package that matches their level of digital literacy.
For those clients who really aren’t capable, for whatever reason, of completing their records digitally, HMRC does have a provision that allows them to nominate someone to update their information for them. As their accountant, you are eligible to take on that role so those who are digitally excluded will not be left floundering in the dark.
If you’re still not convinced about how MTD will work in practice or you simply want to keep abreast of any ongoing developments, keep an eye on the Countingup blog for more updates!