Are you filled with dread knowing the next phase of MTD is coming in just six months? Or do you see it as an opportunity to grow your practice? We're in the latter camp. There are 1.1m VAT-registered businesses that must comply with MTD for VAT from April 2022 and 4.2m unincorporated businesses, individuals and civil society organisations, including around 2.6 million self-employed individuals, and 1 million landlords. The majority will need to be compliant with MTD for Income Tax from April 2023. While MTD for Income Tax has been put back a year, the extension of MTD for VAT and the pilot for ITSA remain on track for April 2022. There’s only one way to tackle these enormous changes with confidence rather than fear. Solid, proper preparation. Planning ahead and working out the strategy now means that you can make as much out of this opportunity as you want. The first part of an MTD game plan is to work out which clients will need what support and when. By segmenting them into a quadrant based on two planes, it’s easier to prepare your plan. Those planes are: 1) digital readiness and 2) compliance stages. Digital Readiness. Some clients will give you a shoebox of receipts; some will send spreadsheets; and others are digitally mature, using digital record keeping software and more. Compliance Stages. Each client will be at a different stage. What are they doing now and what are the requirements? Are they self-employed, VAT-registered clients or MTD for ITSA pilot – your test cohort? Put them into the groups, and plan month by month. Using this approach you segment your client base and understand: How many you have at each stage? How they are doing their record keeping? When you are going to onboard them? What software they are using, if any? This is one of the best practices we’ve seen help to plan for MTD. What best practices are you using? What is helping (or hindering) you to manage the shift to MTD with your clients?
Posted by Accountants' Club at 2021-10-31 21:01:03 UTC