What Making Tax Digital Means for Accountants

As momentum gathers around the Government’s Making Tax Digital programme (MTD) it’s time for accountants to focus, once again, on communicating to clients the need for urgent action.

If you’ve been a PracticeWeb client for a while, you’ll know that we’ve been banging the drum about the content, SEO and engagement opportunities presented by MTD for years.

Our argument has always been that accountancy firms which spotted this as an emerging topic and produced quality content early on did well as a result.

Because they had pages and blog posts about MTD, when the deadlines began to hove into view and SMEs hit Google looking for advice, it was those firms’ websites which surfaced in results.

John Stokdyk, editor-in-chief of our sister business AccountingWEB, has been observing the ups and downs of interest in MTD over the past few years:

“For AccountingWEB, MTD has taken on the epic proportions of one of those multi-series drama franchises like Downton Abbey or Game of Thrones – there have been just as many suspense-filled plot twists, but we’re still a long way from the ultimate finale.

“We started tracking the subject in 2017 around a year ahead of the original implementation date of April 2018, but early progress was derailed by a sequence of political mishaps. The Panama Papers were invoked as a reason for delays, followed by the Brexit referendum and two general elections, during which the civil servants weren’t able to progress the tax plans.

“When the original timetable became untenable after Theresa May called the 2017 general election and sent the civil service into purdah, the MTD clauses were stripped out of the 2017 Finance Bill to ensure it could be passed before Parliament dissolved.

“The post-election chaos left no time to reintroduce them, so the government opted to postpone the go-live date from 2018 to 2019 and to switch horses from quarterly income tax filing to VAT, which was already being filed quarterly by most taxpayers.

“Interest in the subject built to a climax on 1 April 2019 when MTD for VAT officially went live, but there was a second peak three months later as accountants got to grips with the reality of actually filing MTD for VAT returns.

“Interest subsided rapidly after that and we were in for a ‘quiet’ year for MTD during 2020 until the lack of adequate self-employed income data (for SEISS claims) prompted an MTD revival, and the course was set for a widening of VAT filers and the introduction of MTD for Income Tax Self-Assessment (ITSA) in 2023. But it still won’t be over, corporation tax will be next in line for 2024-2026 and more complex requirements for partnerships will eventually follow.”

As John suggests, there’s a growing interest in information on MTD which is likely to peak again in the next year or two.

The opportunity for your firm is in building a body of content now so that when the crunch comes, you’ll be able to draw in new potential clients.

They’ll be people who have heard of MTD but are confused. They’ll want clear information, advice and support.

Here are some of the things our research suggests they’re likely to want to know.

Is Making Tax Digital compulsory?

VAT-registered businesses turning over more than £85,000 in 2020/21 must comply with MTD.

At present, though, many businesses don’t have to comply and, in fact, even those which do have got until April 2021 to put digital links in place.

As you’ll see from the deadlines below, though, its scope continues to grow and it’s likely everyone and everything will be recording and reporting digitally by the end of this decade.

Most accountants will want to encourage their clients to take MTD seriously, act now and aim to be compliant as soon as possible.

Making Tax Digital deadlines

Since April 2019, VAT-registered businesses with a taxable turnover of £85,000 or more have been obliged to keep digital records and submit VAT returns using MTD-compatible software.

From April 2022 that requirement is due to extend to all VAT-registered businesses, regardless of turnover.

Then, from April 2023, it should also extend to cover self-employed businesses and landlords with business or property income above £10,000 per year. (This is the ‘MTD for ITSA’ John Stokdyk mentions above.)

The next phase – the big one – will be MTD for corporation tax. That’s currently being consulted on and isn’t expected to kick in before 2026.

What you need to do to prepare for Making Tax Digital

It’s worth drawing up a communications and marketing plan specifically for MTD. What content do you need to produce, when? And how will you distribute it to your clients and prospects?

A popular approach is to build a ‘hub’ on your website – a page where all the information on a particular topic can be gathered.

PracticeWeb clients on our Horizon website platform can achieve this fairly easily by using tags and/or categories on their blog posts and then choosing to display only MTD-related material on their hub page using a widget.

Consider writing or commissioning a complete guide to Making Tax Digital – something of around 3,000 words covering every aspect of the topic. This could form the centrepiece of your hub page.

You might also share it as a gated eBook to capture the details of potential leads.

You should then aim to write at least one blog post per month about MTD, all of them linking back to your flagship complete guide. These blog posts might cover the latest developments, of which we can expect plenty in the next year or two, or offer more in-depth information on some specific aspect of MTD.

Consider producing short videos to go with each one. They don’t have to be elaborate – it’s just about giving people another way to engage with the information. These can be embedded in your blog posts, or on the hub page, or shared on social media.

How PracticeWeb can help

We have updated our guide; ‘How to prepare your clients for Making Tax Digital’ to help you to make sure that your clients are prepared when the time comes.

Download our guide which includes a four-point checklist to help you plan your firm’s MTD content strategy in the lead-up to 2024.

Existing clients can expect to see MTD content in our Business & Tax pack and in the daily newsfeed we supply as and when the developments occur.

Those to whom we provide tailored content can include MTD on their content calendars and leave us to produce engaging, up-to-date blog posts on their behalf.

We also produce white papers, eBooks and other longform content on commission.

Get in touch to get MTD content from PracticeWeb.