What’s the best software to use for MTD?

There’s no easy way to answer that. The landscape is constantly changing and new products are coming to market all the time. But here are a few things to consider:

1. Are you looking for free or paid-for software?

Although HMRC aren’t providing any free software, they have been encouraging software developers to provide MTD software for free. Some software providers have risen to that challenge. There are free fully functional MTD-compatible software packages available, as well as ones that are free up to a point but have reduced features or usage limits.

2. Do you have access to any MTD-compatible software for free via your bank (NatWest, Royal Bank of Scotland, Ulster Bank, Mettle, Barclays)?

Having a business bank account with the NatWest group gives you access to FreeAgent, and a Barclays business bank account gives you access to FreshBooks.

3. Do you use an accountant?

If you do, who is going to submit your four Making Tax Digital quarterly updates – you or them? If your accountant pays your software subscription, you may need to ask them to update the software settings before you can do your own quarterly updates.

4. If you use an accountant but want to submit your own quarterly updates, how easily can you collaborate with them?

Are you using an all-in-one tax package, that enables you to submit the quarterly updates, and your accountant then logs in to the same software to do your end of year return? If not, can your software digitally export your bookkeeping data in a format that your accountant can import into their tax package?

5. If you don’t use an accountant, does the software you use enable you to submit the end of year return as well as the quarterly updates?

If not, will your software be able to digitally transfer your data to a tax package at the end of the year so you can complete your MTD end of year return?

6. How do you currently keep your records?

If it’s a spreadsheet or software package that isn’t MTD-compatible BUT can digitally export your data in a format that can be imported into MTD-compatible software, you may not need to change what you’re currently using at all – unless you want to, of course.

7. Would it be easier for you if you did move to different software?

Bank feeds, bank rules, bank reconciliations, document scanning, online document storage, AI suggestions (use with caution!) all help to automate the bookkeeping process and make it less onerous.

Conclusion

There’s no one-size-fits-all software solution. What suits one person and their business may not suit another.

If you’d like:

• to learn how to do your own bookkeeping
• software demos to help you choose a package that suits you
• support in moving from Self Assessment to Making Tax Digital
• accountability in keeping your bookkeeping records up-to-date
• access to an online portal of tips, tools and training resources

Why not join the Springreach DIY Bookkeeping Community? It would be great to see you there!