The Future of Tax

Making Tax Digital

Making Tax Digital is almost upon us with an initial deadline of 1 April 2019. But delays followed by a deferral for those with complex VAT requirements until October 2019 means businesses are at very different stages of implementation.

In this industry survey we invite you to share how you are preparing for MTD for VAT (MTDfV), your priorities and concerns, and the benefits you expect to derive from the digitalisation and automation of the finance and tax functions.

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* 1. How much do you know about Making Tax Digital? Are you aware... (Tick all that apply)

Of HMRC’s MTDfV pilot which is now open to all mandated businesses

Of the need to opt-in to the MTD pilot and that there is no option to opt-out once committed

Of the ability to test processes before formally signing up to join MTDfV

Of the “closure” of the current HMRC portal for all post-mandation obligation periods

Of the April and October 2019 deadlines for digital submission

Of the soft-landing period effective from April 2019 to April 2020

Of the second mandatory date of April 2020 (or October 2020) for digital links

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* 2. How ready are you for MTD?

Our plan is in place and we have begun deployment of the relevant software and processes

We are currently reviewing our strategy

Not started yet

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* 3. If you haven’t started yet, why?

Not a priority as yet

Did not find out in time

Not enough time to prepare

Don't have enough expertise in the business

Takes too much time out of day jobs

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* 4. What solutions are you considering?

A bespoke in-house software solution

Outsourcing to an advisor or accountant

Using an in-house ERP or accountancy system with an MTD software update

An off-the-shelf commercial solution from HMRC's supplier list

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* 5. Have you considered how you will meet the demands of other taxes when they join the Making Tax Digital programme, i.e corporation and income tax?

No, that is not on our radar today; we want to meet immediate compliance demands for VAT in 2019

No, while that is a consideration, current budgets dictate we can only look up to a year ahead

No, for us the priority is VAT compliance when the soft landing period comes to an end

Yes, we are interested in see if we could use the same solution for future taxes but it’s not a prime consideration

Yes, we are looking to future-proof our investment by accommodating other MTD demands

Yes, we are looking to gain a fully MTD compliant solution but also have our eye on the wider picture and can see automation will allow us to also increase our productivity and efficiency

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* 6. Will you or have you tested your processes before formally committing to MTDfV?

Yes

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* 7. Do you have specific concerns around completion of VAT returns with respect to… (Tick all that apply).

Exemption of entities

Adjustments, i.e. for fuel scale charges, partial exemption etc

Amendments and error corrections

Combining records from individual groups/entities using multiple accounting systems

Overseas entities

Special schemes i.e. retail scheme, flat rate scheme, margin scheme etc

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* 8. What is your biggest concern when it comes to Making Tax Digital? (Tick all that apply)

Not yet prepared

How software will enable us to perform functions that we previously did manually i.e amendments prior to submissions

Cost of implementation i.e software, training etc

Constant regulation changes

Retention of data i.e will provider keep records for six years?

Not familiar with the software

Don’t understand why the old process has to change

Lack of technical expertise

The need for all manual processes to be automated

Other (please specify)

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* 9. Which of the following criteria will influence your decision if you are buying a solution? (Tick all that apply).

Recommendation from advisor

Ability to pre-test submissions

Track record of a vendor in delivering compliance solutions and product support

Price

Easy to understand user interface

Additional features enabling ie ability to view historic and future obligations

Wide range of software plug-ins to ensure the software works with existing accounting and ERP systems

Error reporting and audit trail

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* 10. Do you see any benefits that MTD could/will bring to your business in the future? (Tick all that apply).

More accuracy, leading to less errors

Reduction in queries from HMRC

More secure tax returns

Increased efficiency when filing tax returns

Free up staff time to spend on other tax activities

Refocusing of advisors away from compliance work (corporation tax etc)

Other (please specify)