Will Making Tax Digital deliver time or cost savings?

Commentators, industry bodies, the media and policymakers alike have suggested that Making Tax Digital – the government’s plan for HMRC to become the most digitally advanced tax administration in the world by 2020 – will not deliver promised cost savings and in fact could have the opposite effect.

AAT wasn’t so quick to jump on the bandwagon because we could see that there are a number of potential cost savings that could be achieved by adopting a digital tax system. For example, through the increased use of smart phone apps and computers as well as the promised provision of free software.

However, we thought it sensible to survey all 4,200 AAT Licensed Accountants to obtain their views on the subject:

71% of AAT Licensed Accountants who responded to the AAT survey felt that no time or cost savings would be delivered by MTD, 19% were uncertain and just 10% felt that there would be some savings as a result of digitisation.

Whilst the savings, or lack thereof, were a key finding of the survey, it’s important not to lose sight of the fact that HMRC proposals for simplifying tax for the unincorporated business and the cash basis for unincorporated property businesses were largely supported by AAT members.

There was uncertainty around voluntary pay as you go proposals and a large majority (90%) had concerns about the potential corruption, misuse or loss of data that may come about due to MTD, with 45% having some concerns and a further 45% having “significant concerns”.

It could be argued that member’s views have been heavily influenced by the high level of uncertainty around various aspects of MTD. After all, it’s difficult to take a view about something that’s not yet up and running.

Nevertheless, the thoughts and opinions of AAT Licensed Accountants, experienced professionals whose views have the ability to make a valuable contribution to the success of MTD, continue to be taken into account by HMRC as a result of our extensive engagement programme.

With conclusion of the consultation process and the Autumn Statement fast approaching, it’s essential that those involved make their views known. AAT has been doing exactly that and we are grateful to our members for the vital part they have played and will continue to play in the future.

Phil Hall is AAT's Head of Public Affairs and Public Policy.

Related articles