MTD may be in suspended animation, but that hasn't stopped software developers from working on compatible products. Valme Claro reports on a new system from cloud developer Clear Books.
Quarterly reporting has had a profound effect on the accounting and practice software industry over the past 18 months. Since March 2015, the accounting software industry has been liaising with customers and HMRC to establish requirements and develop software to cater for the digital record-keeping and online filing regime envisaged by George Osborne.
The subsequent decision to delay MTD's introduction and who it covers has drained some of the urgency from implementing the new systems, but having put in all the work, Clear Books and other developers are keen to set out their stalls for the digital future.
"We understand that MTD represents a challenge to small business, and both a challenge and an opportunity to accountants,” said Clear Books as it announced two new products this week designed to help micro businesses and accountancy practices deal with MTD.
“There’s a vast number who currently use spreadsheets to keep their basic records and hand this over to their accountants to prepare final accounts and tax submissions,” said Phil Sayers, sales and marketing director at Clear Books.
“For many businesses, the prospect of moving to any form of accounting software could be overkill if the software provides too much functionality. In some cases, they view the costs as being prohibitive. So there was a need for some sort of solution that is as easy as possible to use and easy to move to.”
Spreadsheets for micro businesses
Clear Books Micro is built around a free online accounting spreadsheet for small businesses and provides a first step into a managed spreadsheet environment that can file data for MTD.
“Clear Books Micro will look very familiar to the small businesses that currently use spreadsheets and it is a very simple way for them to record basic accounting data. They can log their sales invoices, log the money that is coming into the business, and their expenditure as they run the business,” said Sayers.
Accountants can also manage the accounts of the clients who are using Clear Books Micro and submit their returns directly to HMRC by subscribing to the Clear Books Practice Edition. This system brings different client accounts under a single interface to manage the different record-keeping formats they are using.
According to Sayers the Practice Edition is similar to the existing Clear Books system and only differs in the way the data is shared with the client: “With our current product, accountants can provide access to their clients so they can see their information and data. With the Practice Edition, only the accountant or bookkeeper can see it. This leaves the control with the accountants.”
Other MTD solutions
Clear Books is not alone in progressing with its MTD product plans this autumn. Nine other vendors have submitted entries in the Making Tax Digital category in the Software Excellence Awards. While the shortlisted contenders have not been selected yet, most of the industry's major players are represented in that list, and many of them have previously spoken about their product developments in this area.
Although the timing and technical requirements of MTD filing are still up in the air, with VAT-registered businesses slated to go live from April 2019, Sayers said Clear Books was pressing on with its efforts in this area. “We are talking to accountancy practices about how they are planning to comply with MTD as it continues to develop over the coming months and years,” he said.
The Software Excellence Awards shortlist will be revealed on 18 August and the winners will be announced at a dinner on 19 October. Find out more from the Practice Excellence Week site.