Making Tax Digital quarterly updates with Pandle

Today I sent in my first successful quarterly update using Pandle.

I had to sign up for Making Tax Digital with HMRC first.

To set Pandle up for MTD for Income Tax, first you need to go to Company Settings / Integrations and enter your National Insurance Number.

Whilst in that screen, click on the “Authorise MTD for Income Tax” button and follow the instructions on screen.

Next, go to Accounting / Categories and check your category settings.

• The HMRC MTD Category column shows you which box on the Tax Return each Revenue and Expense heading will appear in.
• If a Pandle category code hasn’t been matched to an HMRC category, press the edit button and select the right MTD category.
• If a Pandle category code has been marked as Allowable for tax purposes when it isn’t, press the edit button and tick the Disallowable box.

Note: You can’t change any of the presets. If you want to change a default heading to a different HMRC category, or make it disallowable when the default is allowable, you will have to set up a new category code and mark the old one as Inactive.

Initial setup might take an hour or so. If you have any issues, just e-mail and they will sort it out.

To do the quarterly submission:

• Check the closing bank balance(s) to make sure all income received and expenses paid have been included.
• Go to Reports / All Reports, select MTD Income Tax, click on the tax year you are interested in, then click on the green 3-dot menu next to the quarter you are working on and select Calculate & View.
• Review the transactions in each category to make sure everything looks OK. You can do this by clicking on the name of each Account (in blue).
• Putting in accounting adjustments is optional. It gives you a better idea of how your business is doing if you do put the adjustments in, but you don’t have to.
• Once you’ve checked it, you can then submit your quarterly update.

The Pandle part of the process was relatively smooth. The main difficulty was in proving my identity to HMRC before I could connect the software.

Pandle provides a solidly built bit of software for managing quarterly updates to HM Revenue & Customs. I carried out my test using the paid-for version, Pandle Pro. MTD for Income Tax is also available in Pandle Free.

Note: Although Pandle can currently only handle quarterly updates, they are developing software that will enable you to submit your MTD tax return too.