Dext announces end-to-end MTD ITSA solution for accountantsby
Accounting data extraction tool Dext has unveiled a solution for accountants and bookkeepers to submit directly to HMRC on behalf of self-employed and landlord clients under the upcoming Making Tax Digital for income tax self assessment regime.
Announced on Day One of the AccountingWEB Live Expo, the first release of the product will be available to existing Dext Prepare customers on 5 December 2022, and will be available to the wider market in early 2023.
The new tool will be accessible via a new button on the navigation bar for Dext Prepare users and is intended for Making Tax Digital for income tax self assessment (MTD ITSA) clients operating under the VAT threshold.
Technical features released in the first tranche of tools include the ability to create a single list of MTD ITSA taxpayer clients, use a combination of bank data and other source documents to build digital records, and review and export quarterly data in both detailed and summary total form. The chart of accounts is currently fixed to HMRC's standard boxes, but Dext is exploring options around making this customisable at a later date.
Dext anticipates other features will be added as the tool is further developed in 2023, including the ability to check HMRC’s API for 64-8 agent authorisations, bulk client imports, sales invoice creation, and the functionality to check and import income sources from HMRC direct.
The Dext Prepare for MTD ITSA product will be free for Dext customers until 30 June 2023, then available at £5 a month per individual (for a bundle of five) or £6.49 for single individuals. A direct filing option for end users will also be available at a later date.
Under current government plans, MTD ITSA will apply to individuals from April 2024 if their total gross income from self-employment and property exceeds £10,000 in a tax year.
No one-size-fits-all approach to MTD ITSA
“We know that accountants and bookkeepers face a significant change in how they manage and support self-employed and landlord clients,” said Sabby Gill, CEO of Dext, speaking at AccountingWEB Live Expo. “We also know that our existing Prepare product was ideally placed to provide the best possible solution for both our accountant and bookkeeper partners, and their clients.
“We wanted to create a tool that firms can configure to their processes as well as their clients, without having to reinvent the way they work or the systems from which they do so,” added Paul Lodder, vice president of accounting strategy at Dext.
“The new solution puts MTD ITSA into the hands of accountants,” said Ben Smith, Dext’s head of product marketing. “There’s no one-size-fits-all to running an accounting firm, and we’re providing the flexibility, choice and options we believe accountants need, not fixing them to one path.”
The Dext filing solution will work end-to-end, from data extraction, processing and categorisation to quarterly submissions, end-of-period statements and final declarations. Users have the option to file using the Dext Prepare MTD ITSA tool, export data directly to other tax software via digital links, or export via CSV.
Users will be able to select multiple income sources, using bank-feed data, scanned receipts, invoices or other source documents, choosing the operating model(s) they feel appropriate for their clients. Users will also be able to export summary totals and transaction details in whatever format they want, ensuring digital records are in place.
“Smaller landlords don’t always have separate business bank accounts and may not want to provide their personal bank statement to an adviser for the 20 transactions a year that relate to the property,” said Lodder. “The alternative is to upload insurance or repairs invoice, plus using our manual mechanism to enter the rental income. We have that functionality in Dext Prepare and we’re not asking our customers to choose between data sources.”
“A big part of MTD ITSA is data collection on a more regular basis,” added Smith. “Dext has been offering a simple way for clients of all types to provide data to accountants since 2012, and we’re able to use our speed and accuracy to allow our users to operate at scale with significant benefit for both themselves and their clients.”
Echoes of 1Tap
The Dext MTD ITSA solution is not the first time the company has ventured into the field of filing. Back in 2016, under its previous Receipt Bank name, the vendor launched 1Tap, a tax app specifically designed to help UK sole traders with the demands of HMRC’s quarterly filing regime.
While 1Tap ultimately didn’t make the cut as Dext’s MTD ITSA filing mechanism, the development of the product was instrumental in the construction of its latest tool.
“Dext Prepare MTD ITSA isn’t the same product as 1Tap,” said Smith, “but the experience we gained building and running it in the early days of MTD ITSA software gave us a head start in understanding what accountants and their clients actually needed.”
At the AccountingWEB Live Expo on 30 November or 1 December? Come and find out more about Dext’s MTD ITSA solution on stand D10.
Accountants and bookkeepers who aren’t Dext Prepare customers can register their interest for the full release by clicking here.
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