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Tax Software- Another massive increase in prices?

Why do software costs continue to spiral?

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I'm wondering if someone can explain to me why, with inflation averaging 1% over the past year, we are going to be stung for an average price rise from PTP/IRIS of 5% in the coming renewal season (CT package up 7.42%).  Perhaps someone with more time can write an article on it and ask other providers for their increases too to see how the industry as a whole views it's 'customers'.  Prisoners, more like, with a 3 month renewal notice period that ends at the end of January...

Every year the price has jumped.  I don't want or need 90% of the features and probably 100% of whatever they tacked on this year.  Most of the cost in developing software was in that first stage, now they are just tinkering every year to adjust for tax changes etc but the fundamentals remain the same.

For my small practice this is a major cost, but I feel as if they have me over a barrel as changing would involve database transfers and garbled information!  If only we could as glibly rises prices as much as the software providers have over the years...

Thoughts welcome.

Addition 18/01/17:

I managed to get a quote from IRIS for OpenTax (which is bundled with the PTP software that I use).

Total cost of PTP software excluding accounts production, £1,543.50 plus VAT.

Total cost of IRIS OPENtax for PT100 etc. £1,165 plus VAT

I've never asked for or wanted IRIS OPENtax. Stripping access to that out the PTP software is valued at £378.50!

No wonder the price of PTP software keeps rising so much- I wonder if they will offer me a price excluding IRIS OpenTax??

If they do I'll be sure to post about it!

Addition 25/01/17:

Got a reply.  No option for a lower price without it as it is included whether you want it or not.  What a way to run a company.

The attitude seems to be 'take it or leave it'.  Guesses as to which way I'm leaning this year, even with all the extra work that will entail...

 

Replies (31)

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By rjoconnor81
17th Jan 2017 14:39

That's why I moved. I moved from Sage to BTC, saving thousands each year. We did have a long over lap of licences, but it meant we could transfer the data in our own time and save all prior year tax returns to PDF as sage don't offer a read-only license.

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By Tim Vane
17th Jan 2017 15:17

IRIS will continue to raise prices because you and others will keep paying. What incentive do they have to stop? The increased price for you is probably to cover the drop in revenue from all the users who have jumped ship.

And I think your notion that software providers glibly raise prices is not really true. Most other software houses seem to somehow avoid the huge prices rises. It really is just IRIS, which is presumably to fund all the acquisitions they make each year.

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Replying to Tim Vane:
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By JMT21
17th Jan 2017 19:00

I agree. I've had enough and am looking for a new software provider.

TBH some of the alternatives I've seen are pretty poor, systems written 10-15 years ago and that haven't moved on in that time. This is good for the provider (because they don't have to pay for new development) but leaves us with Windows 95-era software.

You've got to tip your hat to the newer cloud-based systems - Gbooks and Capium - who at least offer something new and technically up to date.

I really don't want to go back to an old-school firm that is 1-5 years behind where they should be.

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paddle steamer
By DJKL
17th Jan 2017 15:19

Much the same here.

I had used Tax Assistant for years (since SA came in) once it got swallowed into Iris prices kept rising, I stomached increases for a while then, once the tax software alone was about £850 plus vat (non recoverable), I moved tax to Taxcalc and then followed with accounts production move thereafter. I think I now get both for less than I was paying just for tax.

I did similar with payroll moving from Iris (Old PAYEMASTER bureau) to Brightpay, again after years of using.

Having said the above I did not have that many clients to port over and just added about 10-15 minutes to each job posting prior year ETB. (Got very fed up with rounding)

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Red Leader
By Red Leader
17th Jan 2017 15:28

After being an IRIS customer for >10 years, I have finally sent them a formal cancellation notice.

The annual price rises are ongoing at a ridiculous level. It's an uncomfortable feeling being a cash cow for IRIS!

Moving to Taxcalc (other software is available).

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By bernard michael
17th Jan 2017 16:23

In answer to the OP.
It's because they build up a dependency and then screw you. Exactly like pharmaceutical companies do to the NHS

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By petersaxton
17th Jan 2017 16:54

I'm with Digita and their prices seem to be limited to 3% increase a year, if that. Iris just seem to increase their prices as much as possible.

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counting
By Counting numbers
17th Jan 2017 17:27

IRIS seem to think they can do what they want. Someone in IRIS must have had a brain wave as part of a "great" growth strategy. Increase prices every year and then make them stay with a 3 month renewal notice period.

Could you imagine doing the same thing to our clients? Don't think you'd last too long.

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By marks
17th Jan 2017 22:42

Agree with the above. Increase in software prices just seem to be with IRIS.

I moved to IRIS about 18 months ago and signed up for 3 year contract that was fixed for that 3 years. Was happy to pay the amount knowing that is fixed for 3 years but will look about this time next year if they are going to play silly buggers with renewal amount.

Used to use Taxcalc which preferred from an accounts and tax viewpoint but moved to IRIS due to PM, time recording and automail but with PM systems now such as glide and senta you can get the basic accounts/tax package and bolt on a PM package.

Moving will probably save me about £6k - £7k per year. After wages and rent IRIS is our biggest cost.

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By Manchester_man
17th Jan 2017 23:20

It is because they have had the monopoly for many years and to a certain extent still do. I would say that the majority of medium sized practices still use Iris. I woukd guess that they are trying to coin as much in as possible to help fund their inevitable move into the cloud.

The Iris software engine (for at least some modules) is pretty old now and to move into the cloud for Iris will be at an enormous task with a huge cost and I would think it will be a very long process.

I wouldn't touch it now as I prefer best of breed. There are so many better offerings for the small practice. Taxfiler is still an absolute pleasure to use so I will be sticking with that, in conjunction with other cloud software.

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Glenn Martin
By Glenn Martin
18th Jan 2017 00:53

Iris are brutal when it comes to price increases and tight contracts. This type of post comes up every few months on AWEB.

I think they score with bigger firms with 10+ staff as the cost of changing and re training staff is huge so they get stuck with the inflation busting increases until they sicken people off.

I think the new far cheaper options will smash it at the lower end of market for sole traders. If under MTD all clients all end up on bookkeeping software you won't need much more than tax filer bolted on the end of it at a fraction of the price. I wouldn't worry too much about ditching IRIs

You would think they would do something about it though as it's a gripe so often aired it must do them some damage, that a more reasonable approach to price increases would sort out.

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By cheekychappy
18th Jan 2017 08:30

I used IRIS many moons ago, and in fairness, it was good software. But I don't think that it is suitable for a small practice. Nor is Digita, CCH etc.

For a small practice, there are much cheaper, much faster alternatives out there.

Using IRIS in a small practice is like using an articulated lorry to drive around the Top Gear racetrack and at the end of the race you get a dry [***] from Gary Glitter. It'll eventually get the job, but it's too slow, cumbersome and pains you to use it. A cheap Transit will get round the track much quicker and end with Margot Robbie flashing her [***] at you. I know which I'd prefer.

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By frankdavid
18th Jan 2017 10:57

I am a luddite !. For many years I used Keytime (and Objective Tax its predecessor) for personal tax and HMRC's free offering for Ct600's, preparing accounts using VT but printing them using a spreadsheet.

Panic set in when HMRC stopped agents using its free software last year. This coincided with a major downsizing in my run up to retiring. I bought Keytime for the current round and started using Taxfiler for Ltd Co's which at the price is brilliant. My Keytime licence was only for 50 returns so the overspill went onto Taxfiler. It isnt as good as Keytime but its OK and Keytime personal tax + ltd co's +CT600's would have cost me well north of £1200 next year and I'm now paying £12 per month. Also dont have to print Ltd Co accounts on spreadsheets now.

As an added bonus I resigned from ICAEW having been a member since 1972 which is another £600 odd saved. The combined saving makes keeping a small number of clients (50 or so) viable and I dont have to worry about having Moorgate Place looking over my shoulder.

I used to use Payemaster which was taken over by IRIS, after a disasterous year end run (well pre RTI) I changed to Moneysoft, stunning software at a bargain price

Interesting that Keytime is now owned by IRIS so presumably at some point that will morph into IRIS and that Payemaster is being discontinued

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Replying to frankdavid:
paddle steamer
By DJKL
18th Jan 2017 11:19

Yes, when I used it I always felt that Payemaster was not the favoured son of Iris; its acquisition appeared to be akin to the larger football clubs in Scotland buying a player from their smaller competitors, not because they intended to play the player but more to stop the other teams being able to play him.

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By Ian McTernan CTA
18th Jan 2017 11:33

If the editors read this, please add as postscript on my 'question'.

I managed to get a quote from IRIS for OpenTax (which is bundled with the PTP software that I use).

Total cost of PTP software excluding accounts production, £1,543.50 plus VAT.

Total cost of IRIS OPENtax for PT100 etc. £1,165 plus VAT

I've never asked for or wanted IRIS OPENtax. Stripping access to that out the PTP software is valued at £378.50!

No wonder the price of PTP software keeps rising so much- I wonder if they will offer me a price excluding IRIS OpenTax??

If they do I'll be sure to post about it!

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By Alex_T
18th Jan 2017 12:13

I think the word is finally getting out there that you don't have to pay the eye watering prices quoted by Iris and Sage. I agree completely with @Tim Vane, prices will continue to rise whilst there are companies/individuals out there still paying. For what its worth, I use the following software and they work very well for my practice.

Bookkeeping - Xero
Accounts - BTCSoftware
Payroll - BrightPay

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By Ian_mcdonald
19th Jan 2017 10:33

The majority of Iris costs will be payroll and they will be budgeting for a 5% pay increase in order to retain and recruit the top talent - simples.
Recently my dometic water supplier sneakily increased their charges by much more than inflation. I pointed out to them that I was unaware god had increased the price of rainfall etc etc but it fell on deaf ears.

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By SXGuy
19th Jan 2017 10:39

Have you considered Keytime? They offer a 3 year price fix.

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Tornado
By Tornado
19th Jan 2017 11:00

My view is that as Agents we will be in a very strong position soon to do better deals with software suppliers as it will be up to us what software we recommend to our clients. The accounting and tax software market is competitive enough at the moment but is will turn into cut throat proportions over the next couple of years.

It will be some time before I decide which supplier to go with and I will be looking for an entirely Cloud Based suite of accounting and taxation software which will cost me very little but on the reciprocal basis that I use that suppliers software as my default software for clients who will pay for it either directly to the supplier or to me.

If we are to go along with the Government's Making Tax Digital project (albeit over a longer period than currently proposed) then the software developers/suppliers need to offer us products that fit in exactly with the Government's expectations.

I will not be rushing to commit to any particular supplier but I will eventually go with the one that offers the best software, best deal to me and my clients and of course, the best support.

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By taxhelpukcom
19th Jan 2017 11:08

I'm currently in the process of moving my practice to TaxCalc from Digita.

The great thing I found with TaxCalc is how they respond to queries outside the working day and go out of their way to help users.

Pricing is clearly shown on their website, so you can make a choice easily. Licencing and downloading the software is all really easy too.

With many people buying new PC's, it's great to see TaxCalc providing support for high resolution screens so you can take advantage of them and not have to manually set your PC down to a low resolution.

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Replying to taxhelpukcom:
Tornado
By Tornado
19th Jan 2017 11:26

This is very useful information and highlights my earlier point about the significant influence we do actually have in what software we choose to use for ourselves and our clients.

I would suggest you try to negotiate a deal with TaxCalc and use the published prices as the top limit to negotiate down from.

Please let us know how you get on as I will be influenced in my choice by the comments from users rather than the promotional blub from the suppliers.

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Replying to Tornado:
paddle steamer
By DJKL
19th Jan 2017 11:58

I recall I got the dividend database free from Taxcalc for the first year as a sweetener, so they do negotiate if you think it worth your time (circa £40 saving).

Maybe post 31/1/16 I should point out to them that there is an issue with auto populating dividend schedules re Standard Life shareholdings for 2015/2016 (common holding in Scotland as shares handed out when listed) for some reason b/fwd shareholding not recognised via auto populate o I have had to insert individually-maybe that deserves a refund/money off re next year? ( two clients now I have had to adjust)

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Replying to Tornado:
By taxhelpukcom
19th Jan 2017 13:03

I have a handful of trust clients that I'd already switched to TaxCalc from Digita a few years back - their prices for just a few clients were much better, so I'm already quite familiar with the good service from TaxCalc.

Plus, another thing to look out for is how easy it is to contact a software provider. I've noticed a trend in recent years where some make it harder to do this.

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By iain.mcgregor
19th Jan 2017 12:33

switch to taxfiler - also does accounts and at £10 pm - no brainer as they say

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Replying to iain.mcgregor:
By taxhelpukcom
19th Jan 2017 18:18

I looked at taxfiler when choosing who to use - it's an easy to use system, but they seem to be fairly new.

The prices were too good though!

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By taxhelpukcom
25th Jan 2017 08:38

As an update to this, I've now signed up with TaxCalc.

For an unlimited TaxCalc licence it was more than £1,000 less per year than I had been paying Digita for a restricted licence.

Assuming I continue for at least 20 years until I retire, that's an extra £20,000 saved for the retirement 'fun fund' :)

Importantly for me, the software works right now on a high resolution monitor and will be further improved in later versions to take full advantage of 4k displays.

Also important is the fast response to technical queries - several times I have had replies this month in the evening, after normal business hours.

They are transferring the basic client data over to their system for me, leaving the quieter months of February and March as an ideal time for me to manually upload the 2016 return information as a basis for 2017. This won't take too long as their software is very easy to use.

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By Ian McTernan CTA
25th Jan 2017 19:07

I'd like to thanks all the replies so far which have been very informative.
My limited review time so far tells me Taxfiler is a good fit for my practice as it links in to QB Online and is very cheap but gets the job done. An issue is the lack of technical support by phone but this is less of an issue with cloud based systems.
Taxcalc is more expensive but would still be £1,000 less than PTP for arguably better function.
I'm planning on getting out to clients more and it will be quite useful to be able to show them instant results on the laptop on the tax side as I am now doing on the QB side when showing people how to use it.
Jury is still out as it's a massive change and I'm still not a massive fan of cloud based systems- but am being persuaded by the benefits outweighing the risks (and my obsessive printing out of everything).

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Replying to Ian McTernan CTA:
By taxhelpukcom
28th Jan 2017 14:13

I've now had the basic data transferred over to TaxCalc from Digita - the process was very smooth and handled through remote access.

Now that I have the basic client information in TaxCalc it's an easy process to enter the 2016 tax returns manually - just print the computation/schedules from Digita to Word, then cut/paste the entries over to the relevant boxes in TaxCalc.

It's the best time of year for changing, with the tax return deadline passed and two quieter months ahead before things start up for 2017 returns.

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By andybailey
01st Feb 2017 11:55

There is always a cost to switching systems, but there can be great value too. As @marks said, for most practices software will be the biggest cost after rent and wages.

Even if the cost and pain of switching seem high, the efficiencies you can drive from using a better suited solution can far out way this.

As well as cost and core functionality, look at the support offered by the software provider on migrating from your old solution, training and ongoing help desk. Also, consider what the software doesn't do and how you can manage that- either with plugs or apps or your own manual processes.

This time of year is great for reviewing all of your processes, including your software provider- it's certainly one of the busiest times of year for the sales team at the software companies!

I've been an accountant for 20 years and developed accounting software for the last 10. If you need any further assistance with finding the right software for your practice, please contact me on 07974 717713 or [email protected]

Andy

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By charlesalliban
07th Feb 2017 12:20

I could not agree more with the above contents. I was caught in the same trap for years. I concluded I must be working for IRIS with their price hikes. Being in Devon, business is not so brisk and profitable,so any increase was coming off the bottom line. I shifted the lot to TAXCALC who appear to have their feet on the ground and realise it's a major cost to anyone trying to put together those pesky Accounts and Tax Returns. Give them a call-may be surprised

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Keep Calm, I'm and Accountant!
By i-accounts
08th Apr 2017 14:17

I switched in January to Capium so that I could do a slow move over a 3 moth period, it's been so good with great support and they were brilliant over pricing too and am gradually upgrading the number of licences as I go, I am in the process of growing my practice at a rapid pace so this flexibility has been exceptionally welcome. I find it very helpful that all features are under one roof so to speak and can give clients access to bookkeeping if needed too.

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