Where is industry currently with regard to digital technology? We asked, and the accountants responded, by examining everything, of the creation of digital tax (MTD) to the way they use new solutions.

The survey took place during our webinar to update iris elements, where 1,300 accountants and accountants joined us.

The answers we have received painted an image that is sometimes surprised at the way the profession manages change.

We have discovered a story of challenge and opportunity. On the one hand, there is anxiety about new conformity regulations. On the other hand, there is real optimism that accountants can use technology to obtain this compliance work on the line. We have also seen that people are at the front and at the center of their cloud strategy.

Without further ado, look at our results, starting with what is currently one of the industry newspapers: MTD.

MTD ITSA reality verification: a moment of imperfect progress for industry

We started by asking the accountants how ready their customers were ready for MTD ITSA.

The results were a bit mixed.

In total, 3% said that their clientele was fully prepared and 9% said the bases are almost finished. 43% said 51 to 75% of customers are ready.

However, almost a third (29%) indicate that 25% or less of their customers are set up.

This confirms what many in the industry suspected: significant progress has been made, but there is still a lot to do.

How it aligns with other industry statistics

What we see here align with the broader feeling of industry. It is always a mixed perspective. Customers have different expectations and accountants must juggle deadlines, whatever happens.

For example, HMRC has said that medium -sized practices often feel the pressure between two customers’ sets. On the one hand, they have early “digital” customers. On the other, they have traditional customers who hesitate to change.

The daily life of a practice, it seems, is never simple.

The fatigue of conformity is real, but MTD is a top of mind

The most notable conclusion is perhaps that the accountants have confirmed that MTD ITSA is their first conformity challenge. Overall, 78.8% said it was. It is almost four times more than any other regulatory problem. This reflects the collective concern of the profession concerning the link between complex regulations and customers who often do not understand implications.

The answers have other compliance problems. For example, some accounts have agreed that the law on economic crime and the transparency of companies and LMA were problems for them.

Why MTD is different

However, MTD’s domination reflects a very specific burden. With MTD, the accountants are simultaneously compliance educators, technical performers, And Relationship managers. It is a lot to manage and reminds us of other recent studies. These show increased stress among accounting professionals, in particular those of practices at the service of SMEs. There is a strong correlation between the two results sets.

Regulation pressure

What are the most precious software investment accountants they will do in the next 12 months? Our survey shows that 72% of companies say that it is in tax automation and compliance.

This investment expected in automation considerably exceeds customer experience (15%) and the efficiency of the practice (9%).

When we look at all our results together, it is clear that compliance is absolute priority due to regulatory pressures.

The cloud revolution puts people first

Then we asked the accountants what they think is the most important advantage of cloud technology.

The clear winner? Greater flexibility in the work provisions, as indicated by 51% of the responses.

The reduction in infrastructure costs (13% of responses) and improved security (14% of responses) were one of those far behind the upper choice centered on humans.

This observation captures the fundamental change in the accounting profession after the pandemic. The workplace has changed. The hybrid work and well-being of employees are King. Cloud technology is the key to keeping talents and obtaining a balance between professional and private life.

The way accountants check the identification move

There is more evidence of transition from industry when we examine how accountants address the verification of identifiers for companies.

For example, accountants are divided between the use of automated identification verification tools (53%) and manual processes (47%).

There is something else that is particularly interesting. Among those who use automated tools, 75% prefer a customer client approach. This suggests that accountants want control and flexibility even when implementing new technologies. They do not rush into a complete automation; Instead, they choose carefully when and how to use it.

The future of technology first

What will stimulate the most growth over the next three years for accountants? 65% of respondents say that it will be efficiency through technology. Instead of expanding through traditional methods such as new service lines or acquisitions, they want technology to increase capacities.

The good news is that if they get there, prices based on value and higher level advice is possible. By automating routine compliance tasks, accountants are positioned to focus on the strategic advice that customers are increasingly needing.

The effect of IRIS elements on accounting / customer relationships

How did Iris elements made a difference in the life of the accountants? The biggest change in accounting has seen was to be able to access the data in real time. This, in turn, allows more significant and frequent interactions. These accountants move away from occasional journalists to become continuous advisers.

This transition to continuous commitment is perhaps the most important change in the accounting-client relationship for decades.

A profession transforming pressure into people centered on people

These survey results reflect the state of mind of a profession in charge.

The accountants shape the future of the industry rather than simply shaking by external pressures. Yes, there is anxiety as to the time for compliance and the challenges of technological implementation, but there is also a strategic thought.

The accountants consider how to transform pressures into catalysts for a positive change. Internally, they use it to improve the processes and professional life of their staff. Outside, they adopt digital transformation to better serve their customers.

You are not alone in feeling pressure, but collectively, you discover opportunities. The profession is evolving towards a more efficient, flexible and customer future.

So how are you going to take the technology and use it to improve the life of your staff and your customers?

Discover the possibilities here

By Alan Gregory | March 12, 2019 | 4 minutes of reading

Although there has been much discussion about whether the launch of the Digital Taxation VAT project would be delayed, there are no signs of the initiative slowing down.

This means that the vast majority of VAT registered businesses will need to comply with Making Tax Digital for VAT for VAT periods commencing on or after 1 April 2019, although some entities, such as unincorporated not-for-profit organizations companies and businesses with VAT requirements will not be mandatory to comply with Making Tax Digital for VAT before October 1, 2019.

As a result, accounting firms have only a few months to prepare their clients for the changes to VAT reporting that Making Tax Digital will bring.

Below we describe how IRIS has implemented solutions to help your practice prepare for this new digital regime.

If your customers meet the VAT digitalization criteria

VAT registered businesses with a taxable turnover above the VAT registration threshold (currently £85,000) will need to comply with Making Tax Digital for VAT.

In short, this means that affected businesses will need to store digital VAT records and file digital VAT returns to HMRC using software compatible with the Making Tax Digital platform.

For accounting firms whose clients fall within the Making Tax Digital for VAT remit, we have a range of tax software and accounting solutions so you can file your clients’ VAT returns digitally with HMRC.

All of our tax and VAT reporting products have been recognized by HMRC as being compatible with Making Tax Digital for VAT and offer integrated reporting solutions which should ensure ease of reporting under the new regime.

If your customers are below the digital VAT threshold

Not all businesses will be required to comply with Making Tax Digital for VAT. Specifically, businesses that are VAT registered but whose taxable turnover is below the VAT registration threshold can continue to file their VAT returns online as usual, although such businesses may choose to join the Making Tax Digital scheme for VAT if they wish.

As not all businesses will be affected by Making Tax Digital for VAT, there will be a disconnect between accounting firms’ clients as some clients will be required to comply with Making Tax Digital for VAT while others will not. will not be.

Businesses will therefore need to decide how best to file their customers’ VAT returns, taking into account the different reporting requirements their customers may be subject to. In general, companies can choose to approach this mismatch in one of two ways.

First, accounting practices may choose to take a piecemeal approach to reporting. This would involve filing VAT returns for customers outside of Making Tax Digital’s scope for VAT in the same way as they have done before, while still filing VAT returns for those customers within Making Tax Digital for VAT using our links to compatible software as shown above. .

However, if businesses want a solution that allows them to file all of their clients’ VAT returns from one place, whether or not that client falls under the Making Tax Digital regime for VAT, there is another answer.

Specifically, IRIS will provide a transition solution to VT Software, an accounting software provider that allows VAT return data to be exported to transition software so that it can be lodged with HMRC. This means that all customers’ VAT returns can be filed in one place, eliminating the stress of filing different VAT returns on different platforms.

Prepare your clients to make tax digital

As the digitalization of taxation for VAT represents one of the biggest changes to VAT reporting in recent years, the earlier your practice can be prepared, the better.

The first step is to take the time to review your existing customer list and identify those who will fall within the scope of tax digitization for VAT, as this will help your business communicate with these customers on upcoming changes to their VAT declaration and registration. comply with the requirements.

Additionally, it will also allow your firm to understand how many clients will need to comply with Making Tax Digital for VAT, and how many clients will not need to move to the new regime. This will then give you the opportunity to decide which VAT reporting solution is best for your practice.

Learn more about Making Tax Digital and the latest updates on our insights page.

If you need further information on your customers’ VAT reporting options in the “Making Tax Digital for VAT” section, please do not hesitate to ask a member of the IRIS team for advice. You can also take a look at our new tax and accounting software for a different cloud solution.