Unless theres another delay, MTD will apply to landlords with income above 10k from April 2021. I had thought about setting up some of my clients from April 2020 to use MTD compliant software (or a spreadsheet add-on) so we have a full 12 months to iron out any issues.
But I wondered if anyone had any recommdendations as to which software or spreadsheet add-on may be suitable?
Some clients have management companies who deal with the day to day process of admin, so in certain situations id only need to ability to record income and expenses and file under MTD. Whereas others manage it themselves and could benefit from a full service package.
Ive had a quick glance at VISION for landlords, without a trial run it does seem to be a full service solution, but I think it could be too bloated for those who already have a management company doing most of the work.
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I think it depends!
For landlords with reasonably simple affairs there's no reason why spreadsheets wouldn't work linked to the many bridging software solutions out there.
If you have clients with a number of properties or reasonable level of complexity I'm a big fan of Arthur Online and Re-Leased, which you can link to Xero and QBO
One of my clients is a property management company who are looking to move from Payprop to Arthur. They would very much like to talk to someone who is using Arthur online in a similar capacity, but have so far been unable to find anyone. Do you think your client may be open to sharing their experience? Random question from a stranger I know, but I couldn't let the opportunity pass.
I'd be happy to talk to them. We have a good number of clients using both platforms and they both suit opposite ends of the spectrum.
Fantastic thank you. I'll check with the client tomorrow and then send you a PM. Thanks again!
I will be waiting and seeing myself unless there is a business case for software.
We have picked up a lot of clients lately from accountants insisting their clients use online accounting packages when its not mandated.
We are currently moving to Landmark- an integrated management system with accounts functionality where rental invoices will be auto generated by embedding the lease details into the software- whilst set up re properties/tenants/leases is slow , especially with me doing it, and the software is not that cheap, it does appear to offer a very complete management system well suited to managing our circa 100 commercial leases over three entities with one property interface linking to the three entities. I am currently slowly setting up the smallest enity, just three properties and three leases, and will then move on to the next largest (ideally ready to go on 1/1/20)
Please note we are these days a commercial property group , most clients will likely be residential property owners and I doubt, for that, it will be best fit or cost effective.
I provide bridging software for ITSA and I have production credentials, but I am not on the list of suppliers (which only has four companies on it). I think that is mainly because of work on no-deal brexit which has been a priority for HMRC and stopped work in other areas.
Of the four suppliers on the list only three offer property interfaces. It might be that there are other companies who are in the twilight zone of having production credentials, but not being on the list other than Cirrostratus.
The list is here:
https://www.gov.uk/guidance/find-software-thats-compatible-with-making-t...
ITSA is a lot more complicated software wise than VAT. I wrote an insight piece about this.
https://www.accountingweb.co.uk/community/industry-insights/now-we-have-...
There is an interesting technical design question about ITSA which arises because of the need to manage the processes of crystallisation of liabilities etc. I think that would be more challenging from within an excel submission system, but as in theory it is possible to write pretty well anything in VBA I would think it could be done.
ITSA is a lot more complicated software wise than VAT. I wrote an insight piece about this.
https://www.accountingweb.co.uk/community/industry-insights/now-we-have-...
How a (supposedly) "pro enterprise", anti-red tape government could contemplate imposing that level of pointless administration is frankly staggering!
Is anyone on here supportive of this? Maybe I just don't understand it.
No, you understand it all right,it is just they do not. As far as they are concerned all business interests exist (are tolerated) to serve them, they all have plenty of spare time to jump through these hoops.
The country is not run by those who create wealth just by those who spend/redistribute wealth.
If you start with the assumption that automated tax submission systems are part of the future then there are two says of doing this
a) Submitting all transactions to the tax offices
b) Submitting only summary figures that are necessary for tax calculations
MTD is the latter of those. Other countries are going for a). (at least for VAT).
I think the simpler approach is the better one.
The changes in detail are in my insight article. For a small list of properties I dont think a complex system is needed.
I do have an interface to the test HMRC servers if you want to see how it works and have done some videos.
Hi, if it's MTD bridging software for Excel that you're considering I'll put our own solution forward - Easy MTD VAT (https://easymtdvat.com).
The solution is free to use up until the point of submitting a VAT return (i.e. you can retrieve and view the VAT data held by HMRC without cost). If you sign up for an account at the website stated above you'll get a complimentary submission token so you can submit your first return for free.
The theory is that everything is submitted, but that does not yet work. Hence only taxpayers with simple arrangements can use it for now. They are adding more facilities to it, but may not automate all of it (eg the parliamentarian schedule may not be automated or at least for some time.
Given we have gotten this far with client estimating their tax liabilities based on "what it was last years, plus or minus a bit" which quite frankly works OK, the new system for forecasting your tax bills will fall into the trap of over precision based on extrapolation of data for 3/6/9 months against incomplete data over other incomes.
If you saw the recent surveys HMRC were putting about, they were trying to collect data to say (a) people have had a surprise tax bill, and (b) people would love to know what their tax bill is, both of which will of course get a strong response. Just as you do if you ask "would you like to pay less tax?" "would you like government to provide better services?", people will answer strongly 'yes' to both, without answering the key questions of "who should pay the tax? [Ie anyone but you], and "what services?" [ie ones you use, but not ones others use]
If you asked the question "would you be willing to file your taxes 5 times a year, in order to get a better idea of your tax bill?" I think the answer would be "NO".
I am not convinced this is about getting a better idea of the tax you will pay. If ity was then simplicity would be the way.
Its about reducing the headcount at HMRC and also to allow The Treasury to better forecast tax revenues. But as both think that running a business is like a salary there is little chance this is going to work as they had hoped . We just have to help our clients through another set of changes
There are various advantages for everyone in making use of technology for liaision between taxpayers, their agents and HMRC.
The Digital Tax approach is narrowly about ensuring an electronic audit trail between transactions and tax submissions.
MTD for VAT I waited unless there was a business reason (the client would benefit from the software anyway, which contrary to what HMRC had argued only applies to a fraction of my clients). I made the right decision because almost all have been able to comply with bridging software (main Absolute). I am not going to pilot any of my landlords. I'm going to adopt the same approach as MTD for VAT. Why put clients through pain when it might be postponed again?
There is one major difference. It is relatively easy to get clients to record their own VAT transactions in a spreadsheet because they are merely typing in details from VAT invoices etc. It is altogether harder to get clients to categorise for Income Tax because that information is not on the invoices. For example capital v revenue. I therefore feel that MTD for Income Tax spreadsheets won't work as well, or will require more accountant time.
I think it would be a mistake to try to take all of your clients into ITSA at the earliest possible point. However, there is an advantage in taking one into the pilot scheme. The advantage is that you learn the details of how to make it work effectively whilst not under any time pressure.
You are right that there are more challenges in handling ITSA with standard spreadsheets. Because an audit trail is needed for all of the figures in the return it is not as easy as VAT. That is not just the boxes for different types of expenditure, but also boxes for AIA etc. I do this analysis with an enhanced spreadsheet which has the tax logic built into it.
This, however, is why I think it is more important to spend a little time looking at it before the deadlines start looming into view.