Digital tax - what software to use?
Discussion
Hi,
I've been told that I'm in the threshold of the new digital tax rollout and looking for recommendations of the software solution to use.
To give you some idea, I'm self employed consultant plus a landlord with a long term rental property and another used with Airbnb.
I currently use a bespoke platform for invoicing my consultancy work and just use the rental agent and Airbnb statements on my annual return income plus tot up my expenses for the balance.
My wife is 50:50 on the properties.
I've had a search on what solutions are available, but it all seems a bit of a nightmare to find somthing that fits my needs.
Any ideas?
I've been told that I'm in the threshold of the new digital tax rollout and looking for recommendations of the software solution to use.
To give you some idea, I'm self employed consultant plus a landlord with a long term rental property and another used with Airbnb.
I currently use a bespoke platform for invoicing my consultancy work and just use the rental agent and Airbnb statements on my annual return income plus tot up my expenses for the balance.
My wife is 50:50 on the properties.
I've had a search on what solutions are available, but it all seems a bit of a nightmare to find somthing that fits my needs.
Any ideas?
Have a chat with him/her.
I did the same this afternoon with mine and he told me that no software is needed and just submit the normal format of MS income and expenses spreadsheets that I send to him at the end of the year. Or I can send them to him and he will submit to HMRC quarterly.
He was of the opinion that this is just a monitoring thing and that he will still have to do a normal tax return anyway. He told me that each submission needs to be cumulative so the first one is first three months, the second one is six months etc.
I did the same this afternoon with mine and he told me that no software is needed and just submit the normal format of MS income and expenses spreadsheets that I send to him at the end of the year. Or I can send them to him and he will submit to HMRC quarterly.
He was of the opinion that this is just a monitoring thing and that he will still have to do a normal tax return anyway. He told me that each submission needs to be cumulative so the first one is first three months, the second one is six months etc.
There's a thread on MTD here:
https://www.pistonheads.com/gassing/topic.asp?h=0&...
Taxcalc is what I will probably use, but I only use the bridging software:
https://kb.taxcalc.com/index.php?View=entry&En...
https://www.pistonheads.com/gassing/topic.asp?h=0&...
Taxcalc is what I will probably use, but I only use the bridging software:
https://kb.taxcalc.com/index.php?View=entry&En...
Mark V GTD said:
He told me that each submission needs to be cumulative so the first one is first three months, the second one is six months etc.
Are you sure that is correct? I don't think the software I've looked at works that way: it seems to submit a quarter at time, but I might be wrong. This was exactly what my chartered accountant told me today. He said people giving advice they some special software is required is basically a scam. The tax you owe is still calculated on the normal end of year submission and these new quarterly submissions only require info on income and expenses as they are essentially only monitoring you rather than using it to determine tax obligation.
Maybe special software is required if you don't already have an accountant on board. He told me I could just send the spreadsheets to HMRC myself but I said no and that I would prefer all interaction with them to be via him.
Having a Google myself that appears to corroborate the above - the 'special software' is something that my accountant will use for the end of year submission. All very confusing in any case!
Maybe special software is required if you don't already have an accountant on board. He told me I could just send the spreadsheets to HMRC myself but I said no and that I would prefer all interaction with them to be via him.
Having a Google myself that appears to corroborate the above - the 'special software' is something that my accountant will use for the end of year submission. All very confusing in any case!
Edited by Mark V GTD on Wednesday 11th March 20:25
It's a cumulative system.
Originally, it was intended that HMRC would receive sufficient data to enable them to see what a person's ultimate tax liability from sole trading/landlord activities would eventually come to.
In reality, it can do no such thing - so there will still be a requirement to submit an annual tax return - despite what George Osborne stated in Parliament in 2015.
In other words - absolutely nothing achieved apart from bother and heartache for small traders and landlords - and accountants.
Originally, it was intended that HMRC would receive sufficient data to enable them to see what a person's ultimate tax liability from sole trading/landlord activities would eventually come to.
In reality, it can do no such thing - so there will still be a requirement to submit an annual tax return - despite what George Osborne stated in Parliament in 2015.
In other words - absolutely nothing achieved apart from bother and heartache for small traders and landlords - and accountants.
Eric Mc said:
It's a cumulative system.
Originally, it was intended that HMRC would receive sufficient data to enable them to see what a person's ultimate tax liability from sole trading/landlord activities would eventually come to.
In reality, it can do no such thing - so there will still be a requirement to submit an annual tax return - despite what George Osborne stated in Parliament in 2015.
In other words - absolutely nothing achieved apart from bother and heartache for small traders and landlords - and accountants.
Thanks for all the replies. So to summarise, it's all pointless. This is more admin time that I could be using to make more money, to pay more tax...Originally, it was intended that HMRC would receive sufficient data to enable them to see what a person's ultimate tax liability from sole trading/landlord activities would eventually come to.
In reality, it can do no such thing - so there will still be a requirement to submit an annual tax return - despite what George Osborne stated in Parliament in 2015.
In other words - absolutely nothing achieved apart from bother and heartache for small traders and landlords - and accountants.
I started down this path because my current accountant probably thinks I'm small fry, he cancelled 3 appointments I had booked with him. I'll get in contact with him again to see what he says.
Thats what my accountant said too - Eric knows his stuff!
I will start new spreadsheets next week in readiness for April 1. The first ones will be the same as I have always done (one for income and another for expenses) - but at the end of June I will make sure both are up to date and 'save as' each one to '2026-27 expenses Q1' and '2026-27 income Q1' and submit them, then carry on adding to the first two documents until end of September and 'save as' ....Q2 in both cases, then rinse and repeat until March next year. That way I have the normal annual spreadsheets to submit as part of the annual return plus three 'snapshot' versions, Q1, Q2 and Q3.
I will start new spreadsheets next week in readiness for April 1. The first ones will be the same as I have always done (one for income and another for expenses) - but at the end of June I will make sure both are up to date and 'save as' each one to '2026-27 expenses Q1' and '2026-27 income Q1' and submit them, then carry on adding to the first two documents until end of September and 'save as' ....Q2 in both cases, then rinse and repeat until March next year. That way I have the normal annual spreadsheets to submit as part of the annual return plus three 'snapshot' versions, Q1, Q2 and Q3.
Edited by Mark V GTD on Thursday 12th March 12:18
Mark V GTD said:
Thats what my accountant said too - Eric knows his stuff!
I will start new spreadsheets next week in readiness for April 1. The first ones will be the same as I have always done (one for income and another for expenses) - but at the end of June I will make sure both are up to date and 'save as' each one to '2026-27 expenses Q1' and '2026-27 income Q1' and submit them, then carry on adding to the first two documents until end of September and 'save as' ....Q2 in both cases, then rinse and repeat until March next year. That way I have the normal annual spreadsheets to submit as part of the annual return plus three 'snapshot' versions, Q1, Q2 and Q3.
Depending on the complexity of your records, moving to something like Xero may streamline yours and your accountants' processes so don't dismiss it.I will start new spreadsheets next week in readiness for April 1. The first ones will be the same as I have always done (one for income and another for expenses) - but at the end of June I will make sure both are up to date and 'save as' each one to '2026-27 expenses Q1' and '2026-27 income Q1' and submit them, then carry on adding to the first two documents until end of September and 'save as' ....Q2 in both cases, then rinse and repeat until March next year. That way I have the normal annual spreadsheets to submit as part of the annual return plus three 'snapshot' versions, Q1, Q2 and Q3.
Edited by Mark V GTD on Thursday 12th March 12:18
I love having access to my client's records immediately, rather than having to wait for bank statements etc.
Of course, any system is only as good as the inputs going in, so that's a big consideration!
Thats very true. Interestingly my accountant never requests sight of bank statements, receipts or invoices and accepts the spreadsheet records in isolation. I am asked to sign to verify that the information I have provided him with is full and complete of course.
For me, not having to deal with any software, apart from creating simple spreadsheets, is one of the advantages of having an accountant. As a sole trader/professional consultant my financial dealings are relatively simple with only around three invoices being issued per month and around £3k of annual business expenses. All simple stuff compared to many I suspect!
For me, not having to deal with any software, apart from creating simple spreadsheets, is one of the advantages of having an accountant. As a sole trader/professional consultant my financial dealings are relatively simple with only around three invoices being issued per month and around £3k of annual business expenses. All simple stuff compared to many I suspect!
Edited by Mark V GTD on Thursday 12th March 14:58
Initially, HMRC will not require any of the information to be checked or verified for accuracy AT ALL. Submitting "Nil" returns each quarter will satisfy the requirements - for 2026/27.
For 2027/28 onwards there will be some expectation of accuracy. However, at no point will HMRC EVER have enough information from the four quarterly submissions to enable them to know whether what has been provided is correct and even if it IS correct, it is still totally insufficient to enable an individual's Income Tax/National Insurance liability to be calculated for the relevant tax year.
That is why there is also a requirement to submit a FIFTH "annual" return which -
a) corrects all the errors in the four quarterly submissions
b) makes all the relevant ANNUAL claims that a tax payer is entitled to in respect of their MTD activities (i.e. loss relief claims, capital allowance claims etc)
c) include other non MTD income and allowance claims (e.g. salaries, pensions, child benefit, pension contributions,student loan repayments etc etc etc)
MTD mainly achieves absolutely nothing.
For 2027/28 onwards there will be some expectation of accuracy. However, at no point will HMRC EVER have enough information from the four quarterly submissions to enable them to know whether what has been provided is correct and even if it IS correct, it is still totally insufficient to enable an individual's Income Tax/National Insurance liability to be calculated for the relevant tax year.
That is why there is also a requirement to submit a FIFTH "annual" return which -
a) corrects all the errors in the four quarterly submissions
b) makes all the relevant ANNUAL claims that a tax payer is entitled to in respect of their MTD activities (i.e. loss relief claims, capital allowance claims etc)
c) include other non MTD income and allowance claims (e.g. salaries, pensions, child benefit, pension contributions,student loan repayments etc etc etc)
MTD mainly achieves absolutely nothing.
MEC said:
And are you 'in' this year if your total income exceeds £50K, say £26K self employment turnover + £26K gross rental income?
Unfortunately, yes.And don't use the word "income" as that is far too vague.
The qualifying £50,000 amount relates to "Turnover/Sales" if you are a business and "Gross Rental Income" if you are a landlord before ANY allowable expenses or claims are deducted.
Eric Mc said:
MEC said:
And are you 'in' this year if your total income exceeds £50K, say £26K self employment turnover + £26K gross rental income?
Unfortunately, yes.And don't use the word "income" as that is far too vague.
The qualifying £50,000 amount relates to "Turnover/Sales" if you are a business and "Gross Rental Income" if you are a landlord before ANY allowable expenses or claims are deducted.
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