Making Tax Digital – End of Desktop Accounting software and business confidentiality ?
I have always considered my personal life to be a private zone. Hence , I do not have Facebook or Twitter accounts and nobody follows every move I make or is party to my likes and dislikes. Consequently, I am also immune to having a herd mentality .
I see the business world as no different to the private life. A business advertises to get customers; an individual in his/her private life does the same by virtue of dressing correctly and developing social skills and abilities to sell themselves. A individual is careful with his financial information and does not pass it around and store it on third party devices. You would expect businesses would be the same and even more careful. Well , not quite . With the advent of Cloud Accounting, every bit of financial data relating to a  business is now being uploaded to a server somewhere. That includes bank transactions, copies of all sales and purchases invoices, database of every customer and supplier including their phone numbers and address , not to mention private information about employees. Of course, that does not apply to those using Desktop Software.
Now it appears that HMRC is talking to all the major players in the Accounting software industry about MTD; their assistance and participation being sought to facilitate the production and upload the taxpayers financial data on a quarterly basis direct to HMRC.
I think that I am being realistic  if I think that the standalone, off-the-grid desktop software may not meet the requirements of MTD. All accounting software companies appear to be slowly phasing out the desktop version. New companies that have emerged in the last few years do not even produce desktop software .
So, if every business has to move to cloud because of MTD, how will confidentiality be protected (for those it matters to, I mean). The assurances that : ”data is encrypted” and :”we have strict security features to protect your data” cannot be relied upon in my view.
Perhaps , the solution (again, for those who are concerned) will be to maintain two accounting systems. One will be for their day to day business and will probably need to be on some old unsupported desktop software and another cloud one which gets quarterly data uploaded to it in the form of a TB only. That TB can be the basis of the upload to HMRC; thereby not comprising confidentiality by NOT having all ledgers and transactions stored in detail on cloud software.
I cannot help thinking of the big brother scenario where The Power That Be has real-time access not only to the accounts held at your bank but also to your day to day business transactions on your cloud accounting . This could happen in the not so distant future where the only cloud accounting software companies are the “government-approved” providers.
2024 – by a latter day George Orwell