Enhanced tax calculator for Mettle and FreeAgent users
Mettle users with a FreeAgent account will now be able to see a rolling tax calculation from within their banking app, showing a real-time view of how much tax they’re likely to owe.
Available to all Mettle banking customers whose accounts are synced with FreeAgent, a new feature aims to give small businesses and their accountants a better view of their finances across both platforms.
As a user completes bookkeeping tasks in their Mettle banking app or FreeAgent account (such as categorising transactions or uploading receipts), FreeAgent will calculate the taxes relevant to their individual business (such as income tax, corporation tax or VAT). Once these tasks have been completed, Mettle syncs this information with the user’s FreeAgent account and displays an up-to-date view of their tax position from within the Mettle app.
To use the tax calculator, Mettle users have to be synced to FreeAgent, which they can do through the Mettle app, and update their app to the latest version.
Another enhancement to the tax calculator feature also displays FreeAgent’s tax timeline, where users can see upcoming tax returns and payment deadlines tailored to their small business directly in the Mettle app. The timeline displays different views for sole traders and limited companies.
A potential next stage for the tax timeline within Mettle could be to display an “existing tasks” tab configurable by the accountant (for example, requests to categorise transactions or chase invoices) but this feature is not yet live.
Mettle also offers a “pots” feature similar to consumer banking apps, with automated rules that allow users to save regularly for tax or business expenses. Users can set a rule to sluice a percentage of every inbound transaction directly into their tax pot.
What is not yet live is the ability to explicitly tie the pot target to the tax amount, although users can set this themselves by looking at their tax calculation.
Mettle is a mobile-first business account by NatWest for sole traders and limited companies with up to two owners. FreeAgent was acquired by the NatWest Group in 2018, and the accounting software is currently available for free to all Mettle users. Customers need to make at least one transaction a month from their Mettle account.
Increased accuracy and availability of data
“These updates are a continuation of the work we’re doing between FreeAgent and Mettle to provide an integrated banking and accounting experience,” FreeAgent’s director of product Craig Clarke told AccountingWEB.
For accountants, Clarke stated that the new feature would help to increase the accuracy and availability of data, assisting small businesses and their accountants.
“We want business owners doing the right things at the right time and making more informed decisions,” said Clarke. “From an accountant’s perspective, it’s about having confidence in the quality of data coming in. Tools like the tax calculator and timeline help drive businesses keep their records up to date, reducing the amount of time accountants spend chasing for information.”
Clarke highlighted that the changes were in line with the FreeAgent-Mettle vision of keeping the products separate but increasing visibility between the two tools, and highlighted two examples of recent enhancements.
“If you’re using Mettle out and about, snap a receipt and associate that to a transaction in Mettle, this then automatically syncs to FreeAgent,” he said. “Mettle’s bookkeeping categories are also based on FreeAgent categories, which is a benefit if you use both. The Mettle bank feed pushes transactions into FreeAgent and the categories are then shared within the accounting platform.”
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We have recently taken on a new client (Sole Trader) who has been doing his own Accounts and S/A Tax Returns on FreeAgent for the last 2 years.
2021/22 Tax & N/I circa £5k under declared.
2022/23 Circa £100k turnover, £3k net profit, Nil Tax & Class 4 N/I, only showing £163.80 Class 2.
Client happily submitted both Returns, and paid the tax, but had thought with his £100k turnover, that he should be paying a little more tax.
Like any Digital software, it’s simply as good as the person using it. Very few people will be able to categorise their transactions correctly, but if programs like FreeAgent are automatically calculating the tax & N/I and allowing S/A submissions at the push of a button, how do you expect the Tax & N/I to be anywhere near correct?
To duplicate the incorrect Taxes into their bank App, how’s that going to help?
I 'like' this bit: "For accountants, Clarke stated that the new feature would help to increase the accuracy and availability of data, assisting small businesses and their accountants"!! I think not!
I would think that the times the software would get the tax and NIC correct would be almost zero and to me would be more of a hinderance than a help trying to explain to clients what they thought their tax bill was, in fact, isn't!
My partner uses Freeagent for his small graphic design business as we needed something that he could access on a Mac and I could access on a PC and laptop etc so as he banks with NatWest and it was actually free we went with it. It works fine for us inputting what we need to and doing the VAT each quarter etc but it is quite clunky and you really do need to understand accounts to a certain extent or else you could get in a right mess!!