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Countingup account files MTD for VAT returns


Countingup opens the door to integrated banking and MTD record-keeping.

23rd Jun 2021
Editor in Chief AccountingWEB
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The hybrid digital banking-accounting developer Countingup this month achieved its long-term goal to file MTD VAT returns directly from its online business current account.

“Just over three years ago we set out on a mission to make it easier to run a business by combining a business current account and accounting software in one. Tax filing is the final piece that completes that puzzle,” Countingup founder and CEO Tim Fouracre announced on LinkedIn. “To our knowledge this is a world first.”

When he set up the fintech outfit, Fouracre attempted to differentiate Countingup from other digital banks by stressing its built-in accounting facilities. As business customers incur expenses on their Countingup cards, the incoming transactions are automatically categorised into expense categories based on the boxes in HMRC’s self employed tax return.

When Countingup launched in April 2018, Fouracre vowed to do what it took to equip the banking app for filing MTD for VAT returns by the original target date of April 2019. While that deadline came and went, the MTD facility is a significant milestone for the company, especially with the plan to widen MTD to all VAT-registered entities turning over more than £10,000 from April next year.

The extension of the MTD regime to income tax in 2023 will bring up another 3-4m individuals into the online filing universe – many of whom will be looking for an easy and cheap way to comply with the government’s quarterly reporting timetable.

That will be the next big objective on Countingup's development roadmap, but Fouracre and his team have around 20 months left to write the code and develop the market for its non-traditional approach.

MTD for income tax poses big challenges not just to digital banks and accounting software developers (Countingup, Sage, Xero etc), but also to tax advisers serving the private client market. Freelances and gig workers don’t live up to the ideal client type for most ambitious accountants, but there are a lot of them out there. Tools like Countingup have the potential to encourage a DIY ethic among unrepresented taxpayers by reducing the filing process to a simple click in their banking app.

Fouracre is a qualified accountant himself. Throughout Countingup’s early development phase, he has emphasised that his startup was aiming to work with advisers rather than replace them. They remain an important source for business client referrals and with developments such as the Accountant Hub, Countingup is also designing an interface that will let practitioners manage small clients more effectively.

The promise of the new MTD filing mechanism meant that accountants would have access to “structured bookkeeping records that are the one source of truth - accurate, real-time, highly automated that you can now ping off to HMRC in an instant”, he wrote.


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24th Jun 2021 10:13

The difficulty with this product is that that there is no ability for the accountant to Find/Recode (if xero user) or reclassify (QBO Users) or general ledger to review the detail transactions. Given the typical client codes everything to general/sundry expense including their own drawings, this is a bit of a short coming.

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