Making Tax Digital – headache cured?
Wednesday saw the Government’s controversial Making Tax Digital (MTD) proposal removed from the 2017 Finance Bill. This is good news for UK dentists according to NASDAL (the National Association of Specialist Dental Accountants and Lawyers).
Alan Suggett, media officer of NASDAL and a partner in UNW LLP, said, “The aims of the scheme appeared to be laudable in terms of simplifying and making the tax system more efficient. However, the dental sector would have faced specific challenges.”
One of the key tenets of the scheme is the submission of quarterly tax returns to HMRC. This may not present much of an issue to most businesses as they are used to paying VAT on a quarterly basis and preparing monthly management accounts. However, dentists are not registered for VAT and even larger practices do not generally prepare monthly management accounts or, if they do, these don’t represent a true picture of turnover as such and various adjustments are required at the year end. Therefore, practice owners will often not have financially trained staff and normally use external accountants to prepare accounts. In the case of associates, almost all will rely on external accounting support.
Alan continued, “It seems that with a general election looming, it offered the Government an opportunity to review MTD more closely and allow for proper scrutiny and how the scheme will work in practice. This could be seen as a pragmatic decision to ensure the Government gets MTD right first time.”