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MTD ITSA software runner and riders: APARI | accountingweb
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MTD ITSA software runner and riders: APARI

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In the first of a new series looking at Making Tax Digital for income tax self assessment software options, AccountingWEB profiles Midlands-based developer APARI, whose solution caters for sole traders and landlords.

2nd Nov 2022
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With Making Tax Digital for income tax self assessment (MTD ITSA) currently due to go live in April 2024, many accounting firms are nervously looking over the horizon at the workload and change management pressures it will bring. 

A range of software solutions are coming online to cater for the broad and varied needs of more than four million taxpayers affected by the changes, with tools added to HMRC’s list of software packages compatible with MTD ITSA on a regular basis.

However, the scope of each software is often unclear, along with its suitability for the broad range of clients served by accounting firms. 

MTD ITSA software runners and riders, a new series of articles from AccountingWEB, will examine each tool in the “available now” section of HMRC’s list, outlining the product, its feature set and how it interacts with accountants and other accounting software. 

The series starts with a relative newcomer to the accounting landscape, Midlands-based software house APARI. AccountingWEB spoke with APARI founder Sudesh Sud and chief product officer Anish Mehta to find out about the vendor’s current functionality and future plans.

Vendor name and website: APARI

Product suitable for:

●      Accountants and bookkeepers

●      Sole traders

●      Landlords (UK and overseas property)

Background

APARI was founded in 2014 by Sudesh Sud, a former KPMG accountant who worked in risk and regulatory reporting software for the Big Four firm. He told AccountingWEB he saw an opportunity to automate manual accounting processes and convert accounts into tax returns, and the MTD announcement only strengthened his belief in the project.  

Chief product officer Anish Mehta joined from HMRC’s MTD ITSA team, and APARI’s MTD ITSA tool was one of the first to appear on HMRC’s list of recognised products in 2019.

APARI’s head office is in Leamington Spa, and the vendor also has a presence in London and Germany.

How does the product work?

APARI’s MTD ITSA product is for accountants and bookkeepers looking to streamline client work, and is also available to unrepresented taxpayers.

The software offers data import via bank feeds, CSV, manual entry or receipt capture and also has an integrated self assessment tax return (SA100) tool. 

The product already supports a wide range of HMRC MTD APIs, including retrieval of Employment Income, Pension Income, CIS Deductions and State Benefits.

Is an accountant/bookkeeper partner option available?

APARI’s free MTD Accountant Portal allows agents and bookkeepers to see and do everything their clients can (details here). 

MTD ITSA pilot experience

APARI’s MTD ITSA tool was one of the first to appear on HMRC’s list of recognised products in 2019 and its developers have fully tested the end-to-end MTD ITSA submission journey with both landlords and sole traders: Quarterly updates -> End of Period Statement -> Non-Business Information -> Final Submission.

APARI has been the first user of many of HMRC’s MTD ITSA APIs, and its developers have worked with HMRC to identify bugs in the MTD service, such as mismatches between HMRC documentation and the real behaviour of APIs.

The vendor has invested in development and testing to move its product from being able to make one or two quarterly update submissions (the requirement to make HMRC’s Available Now list) to a reliable end-to-end solution for accountants and taxpayers.

Other solutions offered

A simplified self assessment filing tool (details here).

Listed pricing options

The company is offering accountant or bookkeeper partners five free licences to try out the full end-to-end MTD ITSA process. After this, client licences cost £5.99 per month.

In their own words

To make good decisions in this uncertain economic climate you need figures at hand.

We knew Making Tax Digital would be a fundamental change to the system with the quarterly submissions added to the end-of-year filings. With millions of relatively simple, low-turnover sole traders and landlords, it’s a big headache for accounting firms as realistically they can’t increase their fees by a factor of four or five. So they need to find another way – we’re trying to help them by simplifying the interaction between the taxpayer and the accountant.

We thought the big-budget vendors would be established in the market for MTD ITSA products by now, but it looks like they’ve been struggling. The accountants we speak with still hold the view that most of the products out there are still too complicated to put in front of clients. For sole traders and landlords below the VAT threshold, 75% of the features on those products are just not applicable.  

We’ve put a good number of taxpayers through the pilot and that means we have a solution that’s genuinely MTD-ready.

The pilot hasn’t always been smooth, but it’s enabled us to build goodwill with users and we’re now in a good place, handling new data sets from HMRC such as CIS deductions – a big area of development. Being the first software product to use many of HMRC’s APIs has given us a different perspective. If you look at other products out there, they’ve still got a lot to learn.

MTD is a totally different way of doing things to the SA100 and most accountants still haven’t even seen the quarterly submission process in action. We’re finding more starting to engage with APARI as they want hands-on experience. Going through the process with software in real time is the best way of showing clients what it entails. Getting that feed of real-time information, for example, rental income plus pension income from HMRC, is quite helpful and most people can see the benefit. 

We’re now looking to help more accountants on to the HMRC pilot and get feedback on what they’d like to see for their firms and their clients.

APARI is exhibiting at AccountingWEB Live Expo on 30 November and 1 December. To register or for more details visit the Expo homepage.

Replies (11)

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Morph
By kevinringer
03rd Nov 2022 10:24

If MTD ITSA is anything like MTD VAT, we'll be buried in suppliers (or at least, suppliers on the GOV.UK list). We're not going to have time to read through reviews on all of them. Instead, we need a quick way to compare features, costs etc. HMRC's list enables some basic filtering, but not what we need. It would be helpful if AccountingWeb could create a tool that enables accountants to filter by feature etc. I know this is a big job, and will be a struggle to keep up to date. But HMRC aren't going to do it and unless we have that filter and find products that meet our requirements, most of us will just go for suppliers we currently use. For us, that will be the likes of QBO, Sage, Absolute and PTP. We won't even bother looking at others and don't have the time to read a detailed article on each product.

Some suppliers have different products. The tool would need to list each product separately so that the listed functionality and costs are for that specific product.

HMRC's list includes tax estimates. We all know how misleading they are going to be so that's not a feature many of us will be wanting. We do want to know about bank feeds, invoicing, audit trail, integration with other products etc.

Thanks (4)
Replying to kevinringer:
Tom Herbert
By Tom Herbert
03rd Nov 2022 13:09

Thanks Kevin. While committing to the tool you mention is slightly above my pay grade, I can certainly look into it. What sort of filters are you thinking of? Part of my reasoning for including several of the categories was to be able to produce something like this, but I appreciate they're quite top-level so any help would be gratefully received.

Thanks (0)
Replying to TomHerbert:
Morph
By kevinringer
03rd Nov 2022 14:25

Hi Tom, we have a vast diversity of clients and so far our one accounting product CCH and our one tax return product PTP handles the lot. But that's because we use a multitude of sources to prepare the accounts ranging from manual records to spreadsheets to accounting software. If we're going to have to digitise the transactions and digitally link them into the software, we need something that can handle that massive diversity of clients. We don't want to muck about with exporting CSV and importing, or linking individual cells using bridging software. Because we have to have digital links, those links needs to be truly digital and seamless. Here's a few criteria to start with, no doubt other AWebbers will add to the list.

Does it handle VAT as well as ITSA, and if it does handle VAT does it automate partial exemption, retail schemes, margin schemes etc, does it only handle a single self-employment or multiple, does it have an audit trail (I'm talking about a full audit trail such as Sage 50cloud which is so useful when a client has input something which has wrecked a previously balanced period, much more useful than QBO), does it automate capital allowances, can it handle can it handle multiple properties FHL/non-FHL, how does it handle joint property owners (do we have to divide every transaction by the number of owners and input each fractional transaction into each client's return, or does it maintain a single property which feeds into each owner's return), does it handle everything else needed for the individual's Tax Return (other income, reliefs etc, CGT etc) or do we need different software to finish the Tax Return (I know it won't be called a Tax Return), can it handle partnerships, what other software does it integrate with (I'm not talking about export as CSV then import, I mean software that talks to each other), if the sole trader is also a partner in a partnership, does it digitally link with whatever software that partnership is using to pull across the partner's figures, does it handle farmers averaging relief (I act for loads of farmers), does it produce FRS102/105 accounts as well as unincorporated, are they editable, can it handle CIS (as both a contractor and subcontractor), can it handle employer's payroll, does it automate the correct treatment of prior period corrections, what's the cost to the user, is support part of the price, is support phone or only email, is there an agent portal, what's the cost. That's just some of the points an accountant will be looking into. An accountant is usually looking backwards, preparing last year's accounts or last quarters VAT. The business owner is not interested in the past and wants to know about the "now and future". So they will also want ease of generating customer/supplier accounts, customer invoices (and facility to print/email etc), easy payment options (Go Cardless etc), supplier invoices, bank feed. The software will need to be robust and ensure obvious mistakes are not made. For example, it should prevent the user from claiming VAT on transactions that don't have VAT (I've seen plenty of clients using QBO, Sage etc claim VAT on wages, insurance, drawings, even the VAT payment itself).

Thanks (2)
By ireallyshouldknowthisbut
03rd Nov 2022 11:43

I was amused by your use of "currently" in your opening sentence.

The deep cynicism from this end about this project actually happening seems to be rubbing off.

I don't think they have worked out how to get one type of wing on all the different shaped pigs yet. Every time they look there is another dozen types of pigs wriggling about, and the wings that fit those don't fit the other ones.

Thanks (4)
Replying to ireallyshouldknowthisbut:
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By Paul Crowley
03rd Nov 2022 12:23

Brilliant
What you see is not what you are going to get because nobody yet knows the rules
These articles will time expire just so quickly

Thanks (0)
Replying to Paul Crowley:
By ireallyshouldknowthisbut
04th Nov 2022 15:42

Moreover Kevins post above highlights even when they are done with the pigs, once they step past those and open the next gate they will find it stuffed full of cattle, sheep, goats, and other 4 legged mammals. And then beyond that the flightless birds such as chickens and turkeys. And then the flighted ones such as grouse which they need to work out if actually needs wings or not. And beyond that the wild native animals from bees to badgers, and then onto more exotic animals in it. On and on it goes, but HMRC are only in the first pen telling us there are nearly done, another year and they will have cracked it.

All these animals needing to fly on the same system, for reason which have long since been forgotten or reduced to empty soundbites about efficiency or progress.

Thanks (0)
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By Ian McTernan CTA
03rd Nov 2022 12:24

Probably not the best time to be hitting landlords with yet another headache and charge, not to mention our costs in handling quarterly submissions.

Tenants don't realise just how much landlords pay in costs (not to mention the horrible Section 24 shafting) and charges, licences, compliance.

Just yesterday a landlord client got a long email from his estate agent: they are now charging for compliance at £14 pcm and a yearly £99 charge for a year end report, or £41 to just report information to HMRC. I did ask him to refer back to them and ask what their percentage charge actually covered then!

All these costs add up and end up being passed to the renter. Meanwhile rentals get ever scarcer as we continue to import people.

Not looking forward to having serious discussions with clients next year if it looks like it will actually go ahead.

Thanks (1)
Replying to Ian McTernan CTA:
Morph
By kevinringer
03rd Nov 2022 12:48

To add to the increase in landlord costs, here in Wales the Renting Homes (Wales) Act 2016 starts next month (I know, 6 years late). This is the biggest shakeup in landlord rules and regulations since I've been in practice. It requires new tenancy agreements for everyone (including existing tenants - tenancy agreements are to be referred to as "contracts" and tenants as "contact holders"), and numerous other changes. Most of these changes are good for tenants (oops, I mean "contract holders") and some are even good for landlords (who remain "landlords" and are not changing to "contract issuers"). I'm not objecting to the changes themselves, but it's yet another cost for landlords on top of everything else. And the bank base rate has just gone up, again.

Thanks (0)
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By Hugo Fair
03rd Nov 2022 12:31

I'm impressed that APARI have "have fully tested the end-to-end MTD ITSA submission journey with both landlords and sole traders: Quarterly updates -> End of Period Statement -> Non-Business Information -> Final Submission" ... if only because I'm equally horrified that at this late stage no-one else is claiming the same rather basic competence!

But, although harder to quantify via a check-box list, it would be good if these articles delved a little deeper into HOW certain aspects work (such as making corrections in general and specifically bringing omissions/errors in QUs into line with EOPs and final submission).

I know this is almost the opposite of Kevin's point ... but both are equally valid options for Aweb to consider if the intention is truly to help us (not just drive up the advertising opportunities).

Thanks (2)
Replying to Hugo Fair:
Tom Herbert
By Tom Herbert
03rd Nov 2022 13:41

I'll try my best to delve into specifics in this series. In terms of making corrections, are we talking about the difference between journals and the 'find and recode' (or similarly named functions), or have I got the wrong end of the stick?

Do let me know what information you'd like from the vendors, and I'll endeavour to extract it!

Thanks (0)
Replying to TomHerbert:
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By Hugo Fair
03rd Nov 2022 14:47

Fair question ... I was being (deliberately) a little vague - even whilst calling for you to 'delve a little deeper'!

I guess my cynical tendencies have been honed over the years of watching HMRC originally issue 'accreditation' (now 'recognition') to Payroll products.
Those used to require exam-like conditions (developer had to create a number of databases to replicate scenarios set out in the 'exam', and then perform a number of specified processes against each one ... before submitting the results to HMRC for 'marking').
This was time-consuming for both parties but enabled a decent set of tests to ascertain not just if calcs were correct but, if not, the nature/source of the error.
Even then, I was concerned that the focus was (naturally) exclusively on figures being returned to HMRC ... not what data was collected (and when & how) to support the calculation of intermediate data needed as input by PAYE.
[My suspicions/fears are still being confirmed by the discovery as to how many of the cheaper products don't attempt to properly calculate things like compliance with NMW or Leave entitlement/pay ... see many threads on here].

So, my starting point for any discussion of MTD ITSA products 'listed' by HMRC (I'm not even sure what they call this quasi-endorsement now) would be to clarify what they actually do/offer PRIOR to any submissions ... starting with whether they offer any sort of 'integration' with other products - including prod A for QUs but prod B for EOPs or whatever - and what that involves for the relevant user.
I know the developers all want to claim the whole playing-field, but there's always been a separation (for some anyway) between book-keeping and accounts and tax returns ... so what are the options where this is still a requirement (of the client and/or the agent) despite the focus on a 'digital trail'?

That would then lead (naturally in my opinion) to an exploration of what I had previously mentioned ... HOW corrections are made (without 'corrupting' the digital trail) in source records - and within QUs - and when ensuring these are in line with EOPs and final submission.

So, a shorter answer to your question might have been ... No, not the 'keystroke' functionality of something like find/recode - more the 'flowchart' processes for maintaining the digital trail, possibly via multiple products, whilst of course minimising any resource effort in maintaining consistent (and useable) books/accounts/returns!

EDIT: I've just seen Kevin's excellent further post at 14:25 ... with a lot more specific examples than my attempt at a high-level overview of the paucity of info.

Thanks (1)