Save content
Have you found this content useful? Use the button above to save it to your profile.
Rocket business people
iStock_redit:ridvan_celik_AW_rocket

Five vendors available as HMRC readies MTD ITSA testing relaunch

by

With MTD ITSA private beta testing due to launch on 22 April 2024, an update to its software page has revealed that five products will be available on the go-live day, with several larger players among the notable absentees.

11th Apr 2024
Save content
Have you found this content useful? Use the button above to save it to your profile.

A revision to HMRC’s Find software that works with Making Tax Digital for income tax page shows five software vendors will have their products available for the launch ofMaking Tax Digital for income tax self assessment (MTD ITSA) private beta testing, currently scheduled for 22 April 2024. 

The page also lists 21 MTD ITSA products currently under development, some of which may be available for the 2024/25 tax year, and others for 2025/26 or later.

Software available for the private beta testing launch will be:

Even with a relatively short list of vendors, the relative sizes and range of services offered differ dramatically. While most accounting professionals will be well-versed with accounting software giants QuickBooks Online and Sage, other tools are not as well-known. 

123 Sheets is an established spreadsheet and bridging software provider run by chartered tax adviser Peter Hamilton, and used by around 33,000 entities for VAT and tax return filing.

Meanwhile, self assessment direct is part of Cirrostratus Exedra Ltd. The company is run by AccountingWEB regular John Hemming and was set up to provide MTD and cloud cashbook services. As listed on its site, Cirrostratus provides its services on a “freemium” basis, with a free basic service and additional chargeable add-ons.

AccountingWEB has not come across “SE reports” before. While its parent company Cambridge Harvard Academy of Energy Ltd has been incorporated since 2007, its accounts show it to be relatively inactive.

Check the terms and conditions

An Institute of Chartered Accountants in England and Wales (ICAEW) update about the MTD software changes outlines that HMRC has plans to expand on communications and guidance around the testing launch date.

Caroline Miskin, senior technical manager, ICAEW Tax Faculty commented that it was “disappointing that a wider range of software is not yet available”.

“Choosing the right software is a critical decision,” she continued. “Software products do need to comply with HMRC’s minimum functional standards but these are quite minimal. This means that there will be very significant differences between products.

“Cost is obviously a major consideration. The list includes some free products, but it is important to check the terms and conditions as well as what functionality is offered.”

Notable absentees and vendor advice

Among the notable absentees on the software available now list is Xero, which is listed in the “Software in development” section, alongside others such as FreeAgent, IRIS, TaxCalc and Wolters Kluwer.

Stuart Miller, UK director of product compliance and industry engagement at Xero, told AccountingWEB that the vendor had chosen not to take part in the latest round of testing, and instead will be joining the MTD ITSA public beta testing in 2025.

“We have confidence that this will be closer to the real experience offered to users in 2026,” said Miller. “We will continue to work closely with HMRC to support this programme and ensure we keep our customers’ best interests at heart with our wider product development roadmap. 

“We’re committed to providing an MTD ITSA solution and supporting our customers through the change, and will be ready for MTD ITSA in April 2026.”

The decision by vendors previously on the MTD ITSA software available now list not to take part in the private beta phase is likely to come down to a willingness to commit development and marketing resources to a programme that has seen multiple delays and specification changes.

No specific timelines

In moving from the small group of users currently in private beta testing and encouraging a more diverse range of taxpayers to sign up by removing some of the eligibility restrictions, 22 April 2024 will mark a new phase in the rebooted MTD ITSA project.

Private betas are generally test projects in a software release cycle that are locked down to certain users or run as invite-only trials.

While no specific timelines have been set out for the next leg of the MTD ITSA journey, it’s understood that this will be a “public beta” testing phase where, in theory, the majority of taxpayers can freely join the programme. This public beta is likely to be launched in February 2025. 

In 2026/27, self-employed individuals and landlords with income of more than £50,000 will be mandated to MTD ITSA, while 2027/28 will bring those with an income of more than £30,000 into the system.

Tweak to the sign-up process

AccountingWEB understands that the sign-up process for this round of MTD ITSA testing will differ from previous regimes.

Rather than liaising with software vendors to be added to the testing programme, interested agents or businesses will sign up for MTD directly via pages on gov.uk and be added to the process by HMRC. They will then be asked to find compatible software (or contact their existing provider if the vendor meets HMRC’s requirements).

This has apparently been done to cut down the amount of time testers, vendors and HMRC spend liaising with each other to add a user to the programme and authorise their use of the software.

A vendor familiar with the programme added that for this round of MTD ITSA testing, HMRC is putting a focus on onboarding agents. This is to give them the maximum amount of time to get used to the process and trial software for a full year before MTD ITSA is mandated in 2026.

Replies (20)

Please login or register to join the discussion.

avatar
By jonharris999
11th Apr 2024 10:45

Oh dear. I was one of very few to stick my neck out in a recent AnyAnswers thread on this and say that we would probably try and play. But if Xero aren't, we aren't.

Thanks (3)
avatar
By AdamJones82
11th Apr 2024 12:22

Wow, a whole FIVE. It's all systems go folks!

Thanks (6)
Replying to AdamJones82:
avatar
By FactChecker
11th Apr 2024 17:24

I've said it before (countless times - including only a couple of days ago on some thread somewhere on this site) ... but it's not even 5.

- it's actually only 2 (and a bit) with any real bookkeeping capabilities;
- no-one (including the 2) knows how complete they are, as specs are incomplete;
- no taxpayer is going to move software just to be in the pilot;
- there's still no definition of the whole MTD cycle or how to correct errors.

[I've no problem with the bridging solutions - but accepting them is a tacit admission by HMRC that the supposed necessity/benefits that were the foundation of MTD are now a sham.]

HMRC have probably employed someone by now to physically weld the necessary blinkers to any staff who have to pronounce on this 'project' ... but it's hopeless.
It's like ordering a pet for your child from Amazon and not being expected to complain when the driver instead tosses a dead fox over your garden wall (you didn't specify 'breathing')!

Thanks (7)
Tornado
By Tornado
11th Apr 2024 12:39

The future is Digital .......... or is it?

Looks like a slightly underwhelming response to me, but if they can get more than nine people taking part in the pilot/beta this time, then that would be a notable achievement.

Thanks (7)
Replying to Tornado:
avatar
By Open all hours
11th Apr 2024 12:55

I understand they get to take the rest of the week off as soon as they get into double figures on the pilot.

Thanks (4)
Replying to Open all hours:
Tornado
By Tornado
11th Apr 2024 13:12

Open all hours wrote:

I understand they get to take the rest of the week off as soon as they get into double figures on the pilot.

We will all look a little silly if they get the 400,000 that they seriously expected to take part 6 years ago!

Thanks (4)
Replying to Tornado:
avatar
By Rob Swan
11th Apr 2024 13:31

Decimal point in the wrong place? ;P

Thanks (1)
Replying to Tornado:
avatar
By Rob Swan
11th Apr 2024 17:30

Sometimes tax stuff - more correctly HMRC - confuses me.
400,000 participants, six years ago, on a trial which hasn't started yet.
Hmmm.....

That book will never balance!

Thanks (1)
Replying to Tornado:
avatar
By Paul Crowley
12th Apr 2024 17:16

I have a 99% confidence level that that 400K is less likely than flying pigs

Thanks (3)
avatar
By JustAnotherUser
11th Apr 2024 12:50

Find software that works with Making Tax Digital for Income Tax
5 providers
21 in development
Commercial software suppliers for Self Assessment: 40 providers
Find software for Making Tax Digital for VAT: 543 results

Speaks volumes

Thanks (3)
avatar
By Mr J Andrews
11th Apr 2024 13:49

The picture sums it up. However the rockets could be a slight lower.

Thanks (2)
avatar
By johnjenkins
11th Apr 2024 15:58

de der, der der, der der, der der. "I think we will need a bigger boat".

Thanks (3)
avatar
By johnthegood
12th Apr 2024 06:33

and 3 of the 5 are not real software, with respect to those bridging providers who are filling a gap, but surely that was not what was envisaged for MTD, I seem to remember back in the day it was "everyone on proper software" until they reluctantly accepted that actually you can carry on as you were and use a bridge!

Its a farce

Thanks (5)
avatar
By Postingcomments
12th Apr 2024 14:39

Then you have HMRC looking for guinea pigs to test-drive their new digital prison.
For no fees, I'm sure. Like HMRC don't already steal enough of your time.

Thanks (5)
avatar
By Graeme Lindsay Abdn
13th Apr 2024 13:58

Question and answer from HMRC re MTD from July 2018:
Q: What happens if my MTD software provider goes bust and I can't get the digital records for the previous tax returns? OR there is an issue with the software provider keeping the records?
A: Briefly, we have arrangements in place with all software providers that oblige them to make their customers' own data available to them even if they can no longer support their customers.

So, it appears HMRC impose no legal obligations on the software providers to ensure this data will remain available and even if they have, more importantly, how HMRC will enforce this?

As highlighted around this earlier date on AccountingWeb, if a new MTDforIT software company entrant goes bust, they will be unable to pay the owners of the servers to retain accounting data. Will the server owners wipe the data, to free up storage for companies that will pay them? Who owns the data anyway? The client, accountants who enter it, the MTDfor IT software company, or the server company?

Sadly, I am not aware if these points have been addressed to date?

Thanks (4)
Replying to Graeme Lindsay Abdn:
Tornado
By Tornado
13th Apr 2024 14:23

Very good points out of hundreds of matters that still need to be addressed. (There is also the matter of which county the data is being stored in).

It would be nice to have some fully tested (for two years at least), integrated and practical software to use at this stage but we still seem to be on step 1 of 100 in this process.

The MTD project is massive and too complex to ever actually work properly, but I suppose it does provide income for many and massive profits for others whilst it is kept alive.

So that's alright then.

Thanks (5)
Replying to Graeme Lindsay Abdn:
avatar
By Rob Swan
13th Apr 2024 16:34

I believe HMRC made an adjustment to the law to cover the 'Export' of user data (ie. User data not being held in the UK) as most/many cloud providers hold and/or copy data to their servers in the US and/or other non-UK locations. So, technically speaking. the data in question may not even be held in a domain where UK law applies. That'll be interesting when.....

Thanks (1)
By ireallyshouldknowthisbut
15th Apr 2024 11:33

HMRC seem to have got the software developers backs up as well as accountants.

I dont know why a software vendor would be putting any serious resource into this failed project.

Its dead, they just wont admit it.

Thanks (2)
Replying to ireallyshouldknowthisbut:
avatar
By johnjenkins
15th Apr 2024 12:41

Raquel has said that she would pump money into HMRC so perhaps the software vendors will be swayed by £sign.

Thanks (0)