But HMRC’s new, filterable list of MTD for VAT products now shows more than 300 options. Not only does this explosion make it difficult for businesses to select suitable tools, the software bonanza will store up problems for later.
To help steer users through the MTD software maze, AccountingWEB launched a dedicated Software Reviews page, but other industry players are lending a hand too. MyFirmsApp commissioned tax specialist Allison Plager to write an independent guide to MTD for VAT bridging software that filters what she calls the “baffling array” of bridging products down to 10 choices for accountants in practice.
“As with many other things in the UK, the preparation for MTD seemed to be a bit last minute,” said Mike Page, head of product management and customer experience at MyFirmsApp. “In Scotland we had accountants in practice in November-December saying that they still didn’t know what MTD for VAT was.
“There’s always been a big proportion of clients who weren't ready for this step, and the plethora of bridging software out there, quite frankly, is confusing. What we are trying to do is provide some sanity and order out of that confusion.
“HMRC has published a list of recognised suppliers on its website but other than that, offers virtually no guidance on each product. Our intention is to help create order out of the chaos and to give a flavour of what’s available in the market.”
The guide includes a review of each of the solutions as well as contact details, price and recommended specifications.
Although the expectation is for bridging software to be a temporary solution, Page expects them to keep on playing an important role in the future of tax digitisation over the coming months.
Page’s comments were echoed by MyDigitalAccounts founder John Whelan at his Accountex talk on MTD. “If you’re on tight margins with non-compliant software, [bridging software] may be the answer,” he said. “You can still maintain spreadsheet records and use bridging software to mimic HMRC’s old screen system.”
But with 300 options to choose from, how do you pick the right one? “I’ve never heard of 90% of them and I thought I knew accounting software,” Whelan continued.
With very low margins for both accountancy firms going the bridging route and the software companies serving them, some of the new MTD for VAT software providers won’t be able to match the support provided by established specialists, Whelan warned.