HMRC may be allowing eligible businesses to voluntarily sign up for MTD for Income Tax Self-Assessment (ITSA) but we advise not rushing to sign up your clients just yet.
It has been suggested there may be a bulk sign-up option for agents as opposed to the current system of signing up clients one by one so it may be worth waiting a little longer. Also, prior to registration, businesses must ensure they are using compatible software – of which there are only 4 available now. In this article, we will be talking about the software already available and those in development (in the process of gaining HMRC recognition).
Approved Software
All software available now is accessible for the business and agents, below we have noted a few key features of each.
Apari
This is a very vibrant and friendly brand which is on trend at the moment for cloud businesses. MTD plans start from £5.99 per month but this appears to be for their most manual version (e.g., bank accounts cannot be connected) and offers no support other than their FAQ page.
Their next price up at £11.99 has the bank connection capability with a snap and store feature for receipts. The most advanced version at £20.99 per month is equipped to deal with jointly owned property and has a telephone support line. When support is offered in tiered packages, it is important to be cautious about the amount of assistance clients may require from you as their advisor. Having said that, Apari can be a white label solution.
This means you are able to brand up the software, so your clients see your name and not theirs when they log in to use it. If your practice decided this was to be your solo software offering, it could be worth the time investment.
Cirrostratus Exedra Limited
Unfortunately, the link to this website is formatted in a very unfriendly way. The usability of the website is tough and only refers to VAT. We imagine the ‘behind the scenes’ working are great but the user interface is yet to come, so watch this space.
Untied
Geared towards smaller clients with less than £85k turnover (i.e. those eligible for compressed reporting), Untied gives the users a lot of confidence with the early adopter programme. If you are looking to onboard some of your clients to be MTD ITSA pioneers, Untied have a great programme
There is a free trial available and at present, no obligation to go ahead so if you are thinking of the one or two smaller clients who may be good to trial the new wave of MTD, this could be a fantastic option. They only have one MTD option which is priced at £99.99 per year (or £9.99 per month).
Xero
Possibly, the most well-known of the software, Xero is the newest addition to the list, receiving MTD for ITSA status on 15th July. This has come at a good time, alongside the announcement of ‘Xero Go’ a free mobile application for self-employed (NB: although the app is free, there are chargeable add-ons to access additional features such as invoicing).
It has not yet been announced how this will work with MTD other than it will help sole traders keep their records in a way that is compliant to MTD for ITSA. Xero are offering accountants to try out their ITSA Beta with a select few clients, if this is something you are interested in, contact your account manager today. Currently, Xero tax is free for practices who have access to Xero HQ.
Development phase
There are a range of software houses currently in the development stage with HMRC, some more known than others, some in the bookkeeping space, some in compliance and others who are new on the scene.
These can be found on HMRC’s website here Find software that’s compatible with Making Tax Digital for Income Tax – GOV.UK (www.gov.uk)
An example of one of the new products to market is Coconut, a useful piece of software for clients who do not have a separate business bank account (although we encourage this, we know in reality it isn’t that simple). We will be writing more on each of the products in coming months as they come out of development stage and have HMRC approval.
We will also be discussing them in a new Digital Technologies membership group with quarterly focus groups for Q&A and exclusive quarterly webinars with updates on the technology vendors in the marketplace.
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