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The TaxZone/IT Zone guide to tax software - Dec 2001

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25th Dec 2005
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Taxation software is one of the IT industry's most competitive markets. Having to cope with changes in tax regulations every year ensures that there is steady demand from practitioners looking for ways to simplify their tax administration burden.

But like their customers, developers are always under pressure to meet tax return deadlines. They also have to adjust quickly to technological advances and the occasional change of direction by the Inland Revenue. Lots of small developers offer personal tax calculation packages, but the market has undergone rapid consolidation in the past few years. This trend is likely to continue.

The arrival of Self Assessment in 1997, coupled with the advent of Windows 95, had a dramatic impact on the industry. New players such as Iris (Transaction Technology) and Solution 6 arrived on the scene, while PC bookkeeping giant Sage swooped to acquire long established tax specialists such as Taxsoft, CSM and Apex in 1999/2000.

This IT Zone/TaxZone guide to specialist tax software suppliers includes companies such as CCH Software, Iris and Sage that supply tax, accounts preparation and practice management software, as well as more focused tax specialists in both the personal and corporation tax fields. Suppliers of P11D and other specialist applications are listed on the popular Tax Links page. There are dozens of companies in the marketplace, so if you are aware of any oversights, please bring them to our attention.

Key features: Links to practice management systems
Calculating tax liabilities and filling out tax returns is a repetitive, routine task complicated by constant changes in tax rates, allowances and exemptions. That makes it an ideal activity for computerisation. Before selecting the appropriate tool, users should consider whether they merely want to automate the form-filling process or if they could achieve more efficiencies by computerising all of their administrative tasks. Larger vendors such as Iris, Solution 6, CCH and Sage as well as some of the lesser known names offer suites of interconnected applications that handle more than just tax. A time & fees routine, for example, could track how much time is spent on a particular client's return.

Key features: Integration and the single database
Integration is the software world's El Dorado: the promised destination that is never quite attained. Software developers offering practice management/taxation suites usually describe their products as a "modular suite of applications integrated around a single database". Ask them to explain in technical terms where and how the data is stored and how the applications exchange it. Or if discussions about the structured query language (SQL), ODBC interfaces and linked objects put you off, take a more practical route and ask the supplier to let you enter a sample client and work on their details and returns. A genuinely integrated system should be able to prove its capabilities by cutting the time it takes to carry out all the different tax and admin tasks.

Key features: Online capabilities
As part of Tony Blair's target to implement "e-government" by 2005, the Inland Revenue is pushing ahead with plans to let companies, taxpayers and their agents file returns via the Internet. This means more changes for the software vendors and more confusing options for the prospective user. Agent Filing by Internet (FBI) was due to become operational from November 2001, but for the next two tax years, at least, the Revenue has committed to supporting the Electronic Lodgement System (ELS).

If you are coming to the market for the first time, it is probably not worth bothering about ELS. But if you're already using it, ELS has the advantage of a four years' experience behind it. It is probably worth sticking with ELS until any teething problems in the Web mechanism have been ironed out. But question suppliers carefully about their Web strategies - you do not want to be left dangling when the Revenue finally pulls the plug on ELS.

Key features: Service and support
Most users learned from the chaos surrounding the introduction of Self Assessment that there is no such thing as perfect software. What really separates the stars from the also-rans is how they deal with problems and glitches when they crop up.

While Sage has built up a reputation for its after-sales support in the bookkeeping market (under the Sagecover licence for which users pay a premium), it has had to deal with some messy fallout from the rationalisation of the CSM, Taxsoft and Apex product families. But Sage has tackled the issues head-on and is showing signs of getting to grips with some of the more complex challenges that confront tax software users. Question vendors carefully about their upgrade schedules, support charges and policies. If you've got a particular area of concern, see if they can put you in touch with users to get an idea of how the supplier handles technical support. Failing that, AccountingWEB's Any Answers section includes numerous threads about different tax software packages.

Further information
This guide is intended as a basic introduction to the suppliers - more detailed evaluations of individual products are planned in the long-term, but are currently beyond AccountingWEB and TaxZone's resources. Wherever possible, hyperlinks have been included pointing the reader to directory entries and corporate pages on AccountingWEB, or to the suppliers' own websites.

Andersen
Like most of its Big Five rivals, Andersen's tax department has constructed its own tools. Unlike some of the others, who dabble in the P11D and corporation tax markets, Andersen has put marketing muscle behind its Abacus software. Very much designed for corporate users, the flagship Abacus corporation tax module produces reports as Excel spreadsheets to give users the opportunity to do their own tweaking and modelling. The firm is focusing on developing ancillary and admin modules such as Cortax to automate all of the tax department's activities. XDb handles data imports from transactional ledgers, that provide information on which tax calculations may be based and there are more than 120 schedules within the corporation tax program to deal with specialist levys and tax rates. "If you have a specialist quirk you need to deal with, it's likely there will be something in there for you," says Andersen. However, the product is aimed mainly at corporate clients - Andersen is less enthusiastic about sharing its expertise with rival accountancy firms.
Key features Comprehensive corporation tax schedules based around Excel spreadsheets.
User profile Nearly 200 tax departments in FTSE-listed companies.
Cost Only divulged to clients in "one-to-one" negotiations

CCH Software (formerly FDS)
Recently revamped as CCH Software following its acquisition by Croner.CCH, the developer formerly known as FDS has adopted a "holistic" approach to taxation software. Strip away the mumbo-jumbo and what you get is the promise of integrated reference material and tax training materials from within CCH tax applications.

The April 2002 release will bring these new features to the flagship personal tax program Taxpoint. But an early indication emerged in December 2001 with the CCH Investigator system. Acting like an automated form reviewer, the software assesses the risk of a return being subjected to an investigation. The program links to a companion CCH Investigation Report and can even refer to Business Focus reports that detail comparative information for the industry in which the client works.

When Sage acquired Taxsoft and pensioned off its personal tax software, it left CCH and Solution 6 relatively unchallenged at the upper end of the market. The personal tax program CCH Taxpoint is particularly strong, with a loyal customer base among mid-size and larger practices, including Big Five firm Ernst & Young. The Corporate application has struggled to attain the same following after taking some time to arrive as a fully functional Windows product. Taxpoint can cater for sole traders, partnerships, and even Lloyd's names.

The core tax program can be accompanied by an add-on Practice Administration module that includes various management tools and a report writer, while Bridge applications can be used to link Taxpoint to accounting and other tax programs. The up-market orientation is backed by a mature CGT module, CCH Gains, and routines that produce capital gains tax schedules for life funds, companies, trusts and private client portfolios. Another product, Ex-Pat Plus, calculates the tax liabilities of ex-patriots.
Key features Full suite bringing together high-end tax applications with online information and services.
User profile 1,300 users among large and mid-size accountancy firms
Prices on application
Related sites PressZone - news releases from CCH Software

Solution 6
Solution 6 was one of the big winners when the Inland Revenue sought to streamline its tax collection mechanisms. Solution 6's PerTAX was one of the first SA programs to ship and helped the developer infiltrate a good proportion of the country's top 50 accountants. Many of those converts stuck loyally with Solution 6 through a period of corporate turmoil, which included the acquisition of accounts preparation and practice management developer Viztopia. Like Sage, Solution 6 has a development and integration challenge on its hands. PerTAX has begun to show its age, but as part of the integration process Solution 6 has set about migrating it to Microsoft's SQL Server database engine. The interlinked modules cope with personal tax returns and all of the supplementary pages, including self-employment and partnerships. Numerous Web-enabled functions are planned. The roadmap is detailed on the company's comprehensive website, which also includes online support facilities.
Key features High-end suite designed for larger firms. Links to practice management tools. Online support website.
User profile More than 10,000 users among small and medium firms - plus several of the Top 50.
Prices on application
Related sites PressZone - news releases from Solution 6

IRIS
Iris lays claim to being the king of integrated tax software. While rivals are striving towards that goal, or acquiring and bolting together different product families, Iris has offered an integrated Windows suite ever since it entered the market in the mid-1990s. The pedigree was reflected in strong showings for Iris in both ICAEW and AccountingWEB customer satisfaction surveys in 2001. Iris modules share the same data from a single source, which reduces the time and potential errors involved in bringing final accounts information, for example, into a personal tax return. Tax experts advise that Iris may not be the top application for really specialist tasks, but it is there or thereabouts in many categories - earning it the best overall score.

The Iris Personal Tax module has a comprehensive set of bundled functions, including a pension planner, capital gains tax and company car tax calculators. On the Business Tax side, Iris claims to be able to output CT600 returns with "almost no data entry" - the information is extracted directly from Iris accounts module on to the tax return form. Iris enthusiastically embranced digital filing via the Electronic Lodgement System and is planning to launch applications to let accountants handle the books and tax returns of their clients over the Web.
Key features Unified database that integrates with accounts prep and practice management modules such as time & fees. Fast, modern software that scores well in user satisfaction surveys.
User profile More than 3,200 firms - small medium and some large
Operating systems Windows 95+
Prices on application
Related sites PressZone - news releases from Iris

Sage Accountants Division
Trying to untangle the twists in the tale of Sage's tax software portfolio would take up most of this article. In summary, when the company acquired Apex, Taxsoft and CSM, it retained the Apex personal tax product, kept Taxsoft for corporation tax and pensioned off CSM's Taxman. A new Control Centre module links these applications together with practice management tools and Sage's best-selling Line 50 book-keeping software. A couple of thousand users opted not to make the product migration, much to the delight of rivals like Digita and Iris, but with 12,000 users, Sage still has the largest UK customer base of any tax software supplier. Sage Personal Tax covers all the bases, but cannot match the requirements of larger accounting firms. Sage Corporation Tax is an entry-level form filler, but Sage Corporation Tax Pro, based on Taxsoft's old product is a mature application used in some of the country's largest tax practices. Because it uses a proprietary database, getting the Corporation Tax Pro system to integrate with the rest of the Sage product range will be a challenge for the developers. In the online sphere, the company maintains the Sage24 website hosting service, which allows accountants to hold client data in an online store.
Key features Integration with Line 50 and accounts prep/time & fees achieved by "Control Centre" add-on. Large user base gives Sage deep pockets to improve integration. Sage24 signals a forward looking approach to handling client data over the Web.
Prices depend on number of concurrent users and number of clients served.
Related sites Sage Accountants Suite site - basic details and sales contact info.

Digita
Ever since Bill Gates' Microsoft turned to Digita for assistance in programming its US personal tax products, the company has been the one to watch in the UK tax software market. With the weight of Microsoft behind it, Digita has captured a large chunk of "consumer" customers and been intimately involved in the Inland Revnue's online filing initiatives. "Online tax is not going to be a trendy think," says Digita managing director. "It will happen like online banking: customers used to dealing with their bank via phone and post stuck with them when they decided to start using the Internet. We are concentrating on building small steps in technology that will allow clients and practitioners to communicate via a common, secure website." Taxability Pro leans heavily on the Microsoft heritage: all the usual interface gadgets are built in and a Windows Explorer-style interface steers the user to an archive of tax reference information. For more detailed searches, the Explorer window can sit alongside an open Web browser window within the application and you can even sign up for a live dividend data feed. Data entry is handled either by typing details directly on to tax forms, or via Schedule dialogue boxes that step users through different income and allowance issues. The schedules calculate the client's liability and can be used to populate the tax return automatically. For business users or those who act as company secretaries, Digita offers a Company Controller product. It also introduced CoTax SA, an entry-level corporation tax package in 2001.
Key features Full implementation of latest Windows interface integrated with Web browser; data entry options including Wizard-like Schedule editor.
Import/export links to TaxSaver program and Revenue online filing portal.
User profile 2,000 users, mainly among small and medium size practices, but the company has recently penetrated several top 30 firms
Operating systems Windows 95/98/NT/2000/XP
Prices: Taxability Pro costs from £299 for single user (75 clients) licence with annual support costing £305. A four-user licence with unlimited clients costs £2,484. CoTaxSA starts at £195, plus £150 for annual support. Multi-user systems cost £495 (with £600 annual support)
Related sites PressZone - news releases from Digita

PTP Software
While others such as the rebranded CCH group are unveiling their "holistic" approaches to tax software, the Oxford-based Professional Training Partnership has been happily plying this business model for years. PTP's software wing grew out of its training programme. Many of its tax lecturers advise on the software design and the accountants who take part in PTP seminars often prompt the company to develop new products. As a result, tax practitioners speak very highly of the quality of PTP's TaxReturn, TaxFast and associated products. TaxFast, for example, sells for £95 and helps anyone considering a change of accounting date or tax basis to work out the tax planning implications with a minimum of fuss. While it offers the form-driven TaxReturn program for compliance work, PTP is developing a market for planning tools in areas such as captial gains and inheritance tax. Its Company Car Tax planner provides a tool that company managers can use to model their tax liabilities. PTP has recently completed the migration of the core TaxReturn program and its Partnership, Turst and Expense companions to 32-bit Windows.
Key features A range of 17 keenly-priced products backed by solid tax expertise and including tax planning products for company cars, inheritance tax and capital gains tax.
Prices TaxReturn starts at £95 for 25 returns, up to £545 for multi-site licence for unlimited number of clients.
Users TaxReturn: 2,500; total of 3,200 users for all applications
Related sites Downloadable demos
Company Car Planner - download available from AccountingWEB Company Car Zone
Company Car Planner workshop - AccountingWEB transcript

Forbes Computer Systems
ProTax from Forbes Computer Systems is a modern, well rounded tax software family designed for the small practitioner. The suite covers personal, partnership and corporation tax self-assessment calculations and extends to payroll, P11D and a contact admin system called Client Base. The user interface is based around the tax forms themselves, but the data is held in a central store which can be used to populate other forms. The Forbes website includes, a straightforward explanation of how to use the ProTax personal tax module in PDF format and downloadable demos. Unlike more corporate rivals, company founder David Forbes dismisses the use of buzzwords and jargon. "Our clients aren't into that sort of thing," he says. In spite of stance, Forbes was one of the pioneering suppliers in online and Internet filing and confesses loyalty to one industry buzz phrase. "We are XML-tastic. It stands for Xtensible Marketing Language."
Key features Complete, low-cost suite suited to the small practitioner; form-driven interface on a full Windows product with database linking personal, corporation and contact modules. CT package is used as a standalone calculator by some corporate tax departments.
Operating systems Windows 95+
Prices £395 for TaxPro Combination (personal, partnership and corporation tax, with Client Base module); add-on modules (eg for inheritance tax, payroll) range from £45 to £195.
Users 1,200, mainly among small firms

Drummohr Technology
Drummohr's flagship product Tax Assistant costs £260 and is a functional personal income tax product designed for smaller accountancy firms and tax agents. Nevertheless, with more than six years in the market, Tax Assistant can handle repayment claims, company tax returns and pensions planning. An add-on Trust module can be included within Tax Assistant or purchased as a standalone product. The Delta product is designed to manage and transmit return submissions via the Electronic Lodgement Service. An evaluation kit can be downloaded from Drummohr's website.

Quality Management Software
QMS produces the SA2000 personal tax system, catering for partnerships and non-resident forms. Has a CT form-filler and pension scheme trustees form.
Prices from £300 for personal tax; £150 for corporation tax return.

TaxShield
Another specialist serving small practices with products for calculating both personal and Corporation tax, TaxShield's Personal Tax Reporter produces returns, calculates tax liability and payments on account and can tackle online submissions. The products are developed and tested by Dudley-based chartered accountants Price Pearson in association with Arnold Homer and Rita Burrows, authors of Tolley's Tax Guide.
Prices £175 for "professional" practitioner version

Tax Computer Systems
Part-owned by KPMG, Tax Computer Systems is responsible for the Alphatax Corporation Tax system. Designed for use by firms such as KPMG, Alphatax handles the full range of CTSA calculations and makes effective use of its website to upload price indices and tax data to its users.

Taxware International
If international sales tax regimes are your thing, Taxware's WorldTAX applicaiton can calculate tax on transactions with the Americas, Asia and Europe and return the value to your accounting program. Taxware has this market pretty well sewn up and has expanded its coverage to include e-commerce transactions of both goods and services. In another innovation, the company maintains an online sales tax calculator

Which? Software
Taking a step on from its role as a consumer champion, the Consumers Association moved into tax software development with the advent of self assessment. At heart TaxCalc is a self-help program for individual taxpayers, but it has also proved to be a popular tool among high street tax advisers.
Prices start from £100 for practitioners' version

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By ktbullatt
01st May 2002 10:09

LKA Consultants - Objective Tax
A very good review of tax software.

However, we are in the process of reviewing and changing our practice software.

We currently use LKA Consutants Objective Tax. There is no review of this.

As we have no purchased our 2002 Tax Return software yet, we would be interested in your comments.

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By Accounting WEB
05th Dec 2001 14:15

Errors regarding Solution 6 Tax Software
I would like to correct an error regarding the Solution 6 offering (PerTAX Family) as mentioned in this article.

Far from being a newcomer, Solution 6 PerTAX has been around in the UK since the early 1980's. A large number of existing PerTAX Family users moved from Unix and DOS versions of the product (known variously as PerTAX, PerTAX Manager, PerTAX SP, PerTAX MP). Solution 6 acquired PerTAX along with its acquisition of Paxus Professional Systems in 1990 but the development team has remained largely unchanged since Paxus days, evolving the product through Unix, DOS and Windows versions and now tackling the challenge of moving one of the industry's most powerful and functional products to a SQL-Server based web-hosted system and providing seamless connectivity to other products in the Solution 6 range.

It is also worth noting that the PerTAX Family has nothing to do with the Solution 6's Australian tax products and is entirely UK developed, UK maintained and UK supported.

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