In the run-up to the first MTD deadline, we’re launching our Making Tax Beautiful series – a fortnightly look into the changing world of VAT from our Director of Product Strategy, Russell Gammon. This week, Russell shares his takeaways from the Tax Transformation Summit 2018, where he joined our CEO Richard Metcalfe and HMRC’s head of the Customer Readiness and External Stakeholder Team Clare Sheehan for a presentation all around Making Tax Digital
The 20-21st November 2018 marked the annual Tax Transformation Summit, where over 150 professionals met to chat “all things Tax Technology”.
Having been to many of these events before, it was encouraging to note the change of pace across the industry. Even just looking at the job titles of the attendees, there are many more “Tax Technology” references than there were a few years ago. Everyone agrees that technology will play a huge role in the future of Tax, and this event proved exactly that.
What was also encouraging was the number of panels, stands and talks from “non-traditional” vendors, Arkk included! Typically, in the past it’s been Thomson Reuters and the Big 4 at the fore, and, of course, they are still there but are increasingly joined by others. The buzz around the room and conversation is steadily moving away from “well we have to buy XYZ, because that’s what we’ve always done”, which is a refreshing and sensible approach for any business in the age of tech innovation.
As a gold sponsor of the event, we held a break-out session to discuss the Making Tax Digital mandate. Myself, Richard our CEO and a HMRC representative covered a range of topics, from detailed discussion of the MTD mandate itself, to a much higher-level discussion around the journey that both HMRC, and the firms that they regulate, are going on. Here are my key takeaways:
6 more months for digital links?
The audience in the room almost exclusively represented more complicated organisations, and therefore are affected by the delay to MTD for VAT by 6 months to October 2019. One of the most popular questions was therefore “as the API requirement has been delayed by 6 months, does that mean we also get 6 extra months on the digital link “soft landing” requirement, to October 2020?”. This was expected, I’d flagged it in our pre-event call with HMRC!
Whilst there isn’t quite a formal answer yet from HMRC, they did go as far as to say “we have listened to the industry on this topic and would be sympathetic to their cause”. So, not a definitive answer, but a heavy indication.
Does delay mean… delay?
We polled our audience for their take on a few areas of MTD. If you haven’t used sli.do before, it’s awesome. It’s a software tool for audience polling and questions at events, but via their own mobile phones, so no need for those ghastly handheld voting devices. The headline for me here was that, despite now having an additional 6 months to organise their MTD for VAT compliance, 59% of firms their timetables haven’t changed. This, coupled with the fact that only 12% of firms polled considered themselves “completely prepared” for MTD, means that there is lots of work to be done in Q1 2019 to get systems into place.
Another interesting poll result was that MTD for VAT was the biggest concern for Tax transformation professionals, ahead of Brexit. So whilst work is going on, it’s certainly not something everyone is assuming will “just get done”.
My main plus-point from several of the conversations I had is that the API-only (also known as “bridging software”) approach has given consideration and then discarded by many. As a firm we’re keen on the viewpoint that an API only solution is not getting the MTD journey underway on the right footing, this is only the beginning and we aim to ensure that as many businesses as possible are going forward with solid foundations to build on. An encouraging number of attendees we spoke to proffered this same opinion without even giving us the chance to set the tone by talking about the value of a full-blooded implementation! The conference was all around how technology can transform a Tax function, and there is nothing transformative about some Excel VBA bolt-on, something, it seems, fewer and fewer people are considering a legitimate or (dare I say) best practice solution.
Overall it was a great event and it was good to see so many new faces (as well as a few of the old ones), I’ve no doubt next year will be even busier!!
If you have any questions about how you’re approaching Making Tax Digital, get in touch with the Arkk team.