Your intrepid reporter attended the ICPA’s Practice Evolution conference today – it was in Manchester, so it would have been rude not to. The event was very well attended and, from the accents on display, even Manchester’s delightful “ring of bollards” had not stopped people attending from much further afield. Tony Margaritelli is the ICPA’s chairman, and hosted the event, and we were able to catch up afterwards.
Needless to say, Making Tax Digital was still a hot topic, even though it has (basically) been postponed. I share Tony’s doubts about how MTD will evolve beyond the implementation for VAT purposes. Once HMRC realises how complex even VAT reporting can be, it may then have a sense of how things might pan out with MTD for direct taxes. (I say “even” because, given the number of boxes on a VAT Return, HMRC probably thought it was on to a winner).
But it seems more likely that the complexities of Brexit will be the bigger problem, in terms of diverting HMRC’s ever-more-scarce resources.
Digita’s Mark Purdue evidently subscribes to the maxim “if you can’t say anything good, say nothing”, when asked about software houses’ reaction to the shock announcement from HMRC that direct tax MTD implementation was to be postponed. I would have been rather less circumspect. As practitioners, we may be somewhat pleased that HMRC has delayed implementation, but the investment of time, money and attention on the part of the software houses must be staggering.
But there was much more to the conference than MTD, and there was plenty on practice development – funnily enough, a couple of those talks focused on client engagement and development through digital resources.
In fact, Tony was adamant that the profession did not really need MTD to be foisted on them:
“Firms are well aware of the advantages of ‘going digital’. We’re already doing it, all over the place: social media, using the cloud, and developing apps – these are high priorities for many of our members right now, and we really don’t need to be told.
One of the most frustrating things about HMRC’s policy with MTD is demanding a one-size-fits-all approach now, to something which would have happened organically anyway. Given the business we’re in, if we can see how businesses can run more efficiently, and be more successful by embracing digital solutions, it’s not as if we’re going to ignore the potential for our own businesses – where we can see it will actually work”.
In Tony’s eyes, HMRC’s approach to agents as regards MTD is symptomatic of a wider problem:
“They have basically forgotten about us. I understand that HMRC’s focus should ultimately be on the taxpayer but they are ignoring the insight we have into how taxpayers work, and how taxpayers deal with their financial affairs. Fundamentally, they fail to grasp that so many taxpayers engage an accountant because they do not want to deal with payroll, VAT and other taxes – they want to spend their time focusing on what they’re good at – their own business. This will not change – and it shouldn’t.
You can see this happening in other areas – their approach to the Personal Tax Account is all about the individual taxpayer, and agent access is just an afterthought. They impose a new requirement on Trusts to register details online – and we still don’t have agent access, even though penalties will apply from January next year!”
One has to wonder if it can be a lapse on HMRC's part, if it happens so consistently. I have to say that much of what Tony says, makes sense. I am also left somewhat bemused by HMRC’s approach to the infamous SA302 calculation so beloved of prospective mortgage lenders: available automatically for download by those who file their tax returns themselves, using HMRC’s own software, but not for those using third-party software (i.e., agents). Rather than simply update their programming so that anyone – and their agents – can download their SA302 calculation automatically, (such as they are supposed to for P2 Coding Notices – although that operation seems at the moment to be more “miss” than “hit”, as many practitioners will be painfully aware), HMRC thought it better to cajole mortgage lenders into accepting third party printouts. This has taken several years, from memory, and is far from universally adopted even now.
HMRC’s latest position, apart from refusing to send copy SA302s to tax agents any more, is to suggest that if a lender insists on an SA302, tax agents should check if a particular lender is on the list of those who are supposed to accept third party print-outs. So I guess we are useful for some things, as far as HMRC is concerned. Just not really to do with tax.
So, a good conference, and some food for thought. Tony is possessed of a real passion for his cause, which is something I have not seen from the other institutes for – well, ever, really.