I read an article in the Autumn 2019 issue of Accounting Practice about the experience of digital taxation in Australia, and the fact that it has introduced various initiatives ahead of the UK. For anyone interested in the future impact of digital taxation in the UK, this article has some interesting predictions.
Accounting Practice is published by the Institute of Certified Practising Accountants (ICPA) and is primarily read by accountants, so Paul Meissner’s article is written for this specific audience. His article, entitled “Digital Down Under”, outlines his experience of the introduction of Standard Business Reporting (SBR) in Australia. The UK is undergoing a similar transition, under the name Making Tax Digital (MTD), so the Australians may provide us with some insights into what the UK might expect in the future.
Paul points out that digital taxation is a data transition method, rather than automation, and he dismisses the idea that accountants will no longer be needed. He notes that, since free online tax software was introduced 20 years ago, the number of Australians who get their accountants to file their tax returns has actually increased.
Making Tax Digital is the UK government’s plan to modernise a range of taxes, starting with VAT, with the aim “to make it easier for individuals and businesses to get their tax right and keep on top of their affairs”. You’d expect that making things easier would result in a reduced workload, but that’s not the experience of similar initiatives in Australia. According to Paul’s article, “more data equals more work”. He explains that the increased data available to the Australian tax office has led to an increase in reviews, audits and amendments of returns. This, he says, has increased the compliance workload of accountants.
Paul’s article concludes that Australian accountants are “riding a pretty sweet wave of compliance” off the back of a digitally-connected and data-driven tax office, and he predicts a similar outcome for the UK. Who knows what the future holds? I don’t like to make predictions, but I’m confident that Making Tax Digital won’t bring about an end to the accountancy profession.
You can read the full article on Accounting Practice Online.