Accounting professionals spend 7 days getting each client Making Tax Digital compliant - but benefits outweigh time investment.
More than half of accounting professionals have experienced stress while getting clients compliant, as many face unwilling or non-digitally savvy clients
However, in the long-term Making Tax Digital is saving accounting professionals time and reducing errors, with three quarters saying it will benefit/is already benefiting their firm
Nine in ten accounting professionals confident in helping clients manage the change to Making Tax Digital
London, UK - 14 December 2021
As the new Making Tax Digital (MTD) for VAT deadline looms for over a million small businesses1, new research from Intuit QuickBooks2, the global technology platform, finds that accountants and bookkeepers are investing a significant amount of time getting clients compliant – but in the long-term, the new rules are benefiting their firms.
QuickBooks’ research found that accounting professionals spend an average of seven working days (55 hours**) helping each SME client get up to speed with MTD, from initial conversations to getting them set up with a software provider. More than half (55%) say that this process causes them stress, with the top reason being some clients are not digitally savvy and will need help complying over the long term (41%).
The majority (62%) of accounting professionals also say that many of their clients are resistant to following MTD rules. This makes the process an uphill battle for many accountants and bookkeepers, who are trying to ensure businesses aren’t penalised for being non-compliant.
The benefits for accounting professionals outweigh the time spent getting clients MTD-ready
QuickBooks’ research found that accounting professionals are positive about the long-term benefits of MTD. Almost three quarters (74%) of them agree that the new rules will save or are already saving them time, and 73% say that it will reduce or already has reduced errors in their clients' tax returns.
Ultimately, three quarters (75%) of accounting professionals say that Making Tax Digital will benefit or is already benefiting their firm, and 75% agree that the benefits outweigh the initial time investment for their clients.
Currently, less than half (48%) of accounting professionals’ small business clients on average are up to date with MTD. However, despite the resistance from many clients in complying with the legislation, 89% of accounting professionals are confident that they have the skills and means to get them compliant.
Pauline Green, Head of Product Compliance & Programs at QuickBooks, says:
“Accountants and bookkeepers play a critical role in implementing Making Tax Digital, initially with MTD for VAT phase 2 and then Income Tax Self Assessment (ITSA). Navigating legislation can be a difficult task, particularly for time-pressed small business owners, and many of these would be lost without the guidance of their accountant.
Though it requires some initial time investment, MTD should be seen as a big business opportunity for accounting professionals. Many are already recognising that it will save them time and reduce errors, leaving more space for strategic advisory work. Getting clients ready well in advance of the deadline means they can immediately start to reap the benefits.
For those who are finding the process of helping their clients comply with MTD overwhelming, help is at hand. QuickBooks has set up a dedicated resource hub full of information that can be used with clients to make the process simpler.”
To unlock the benefits of digital methods, QuickBooks has partnered with Bas Verplanken, Emeritus Professor of Social Psychology at the University of Bath. Verplanken has developed a guide for small businesses on creating and maintaining long-term habits that will not only make their regular VAT returns less stressful but get them MTD compliant ahead of the deadline. The guide can be accessed here.
Johann Goree, Managing Director of OnPoint Accounting, says:
“Some may see Making Tax Digital as just another rule to comply with, but actually there are huge benefits for small businesses and accountancy professionals alike – from having financial data available at your fingertips and the ability to build cash flow forecasts, to reporting and analytics.
I believe that the new legislation will take great steps in improving small businesses’ financial awareness. For accountancy professionals, this is an opportunity to fully embrace digital tools to give better insights and time savings to your clients and your team.”
Sources
11.1 million small businesses eligible for Making Tax Digital in April 2022.
2Independent research conducted by Censuswide on behalf of Intuit QuickBooks with a representative sample of 1500 UK accountants/decision makers at accountancy firms. In field between 1 – 10 November 2021.
**Action to get small business clients compliant with Making Tax Digital2 | Average time taken per client |
|---|---|
Making initial contact about the need to be compliant | 9.9 hours |
Ensuring they are aware of when they need to be compliant | 9.7 hours |
Explaining exactly what they need to do | 10.0 hours |
Helping them to choose a financial management software provider | 12.9 hours |
Getting them set up on the financial management software platform | 13.0 hours |
Total average time taken to set up for MTD per client | 55.4 hours |
Excludes those who don’t do any of these steps. Hours are rounded to 1 dp.
Disclaimer
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