Making Tax Digital – Maximum efficiency option?

Any major IT iniative by Government almost guarantees that the system will be complex and a massive “ fudge up “
One thing that is certain it will not be designed to assist landlords but it will enrich software developers and accountants.

Reply to the comment left by John at 08/04/2024 - 14:18
Probably 'World Beating'

I hope that with only 2 properties between us, we'll not reach the making tax threshold, it sounds a pain in the proverbial.
An excel report, once a year on work laptop is sufficient.

What would actually be useful is if people described their experiences with various different software. What works and what doesn't. If it is fine for people with one house and a very straightforward PAYE job but somewhat unreliable for people with multiple properties, mixed ownership, irregular PAYE income, CIS tax, etc.

For most landlords rental income is on top of wages or pensions. On a tax return earned income is higher up the list than rental income. If software is going to be relevant surely it should reflect the reality of the tax system.

If MTD is simply a case of submitting 3 numbers every quarter why do we need software? Most of us would be perfectly happy using spreadsheets or paper accounting ledgers to arrive at those numbers. The amount of time it takes for someone without a computer or accounting background to get to grips with any of the supposedly MTD ready software is truly mind-blowing. Any of the landlord specific ones want to add numerous functions that are nothing to do with MTD. As there is very little information about what MTD actually looks like it's very easy to waste days getting sucked into completely irrelevant data entry.

I've spent 18 months trying out different landlord software, most of which claims to be MTD ready. Even my accountant says none of them are set up to deal with anything that isn't absolutely vanilla and will need some of the results to be manually corrected.

I'll comment, see if anyone has good answers.
Someone last week mentioned something like
Hammock software is very good.

My accountant suggests Quickbooks which you have to pay to have set up and pay a monthly fee and no doubt have to check and correct any anomalies that occur. I've resisted it so far as it will be time consuming and another indirect cost to add to our growing list.

Xero was suggested to me but my accountant's not keen to engage as they are trained in Qickbooks and, I believe, have a deal with them. They'd offer me training - which would be part of the set up cost

Too many computer nurds for my liking, look what happened with the post office mess - some post masters took their on lives! We rely on computers too much. My car is computerised it broke down I had an auto electrician out three times - couldn’t fix it - took it elsewhere - couldn’t fix it, others wouldn’t look at it. In the end I got rid and used my little Morris Minor which just goes on and on for 60 years no problem! I can see A.I. being dangerous! I’ve grown to like the simple life!

Problem solved – No monthly fees – No expensive software – No accountant fees – minimum MTD fees – superb records – superb reports – MTD compliant

I am a landlord with more than forty years letting experience. More than twenty-five years ago I purchased a book keeping/accounting package from a well-known software company for a one-off fee of £19.

Today that program still exists, unsupported and FREE. I have never needed support for this program as it is really robust.

Having free trialled most accounts packages, despite being business and computer savvy, I find them all too complex, too expensive, can’t handle split ownership, don’t produce bespoke reports or won’t do what I want of them without going back to university, which I left 57 years ago.

Perhaps I am not prepared to put in the immense amount of effort needed to bespoke them or even too tight to pay high monthly fees or they just aren’t simple, yet sophisticated enough, for normal folk.
I still use the free version of the program I bought twenty-five years ago and to date, I have never found an easier package to use, one that gives me total control at instantly producing tailor made reports, for any period or any combination of fields, handles automatic entries such as rent or mortgages, and so on.

After many years I have been able to customize my accounts entries so that quarter by quarter, year by year, the program produces a report, providing your entries are up to date, that instantly produces the correct totals for direct entry into your HMRC online SA100 return.

I sold my original business in 2004 and since then have never used an accountant. I have handled seventeen rentals with ownership between myself, my wife and my son, all within the same package.
However, over the years I have tweaked our accounts and now have split them into one for myself and my wife, plus a separate account for our son.

About ten years ago we had a random tax investigation and was able to send an enormous file of bills, receipts, bank statements etc., off to HMRC well within the fourteen days allotted and received a 100% satisfaction back from HMRC within two weeks. I attribute much of that success to honest and accurate accounting by myself coupled with the ability of the accounting program I use.

Two years ago, I joined the HMRC Making Tax Digital pilot trial. I picked one of the smaller software developers to team up with and find out the requirements. I found out that I needed a version of Excel that had a special feature and which was needed to pair up with my accounts to be able to talk with the MTD program and transmit direct to HMRC
.
It took me a couple of hours to draw up a neat Excel template to dovetail with the data in the MTD link although I spent more time making the Excel template look pretty and easy to follow.

The original accounts package allows me to export a csv file directly from my accounts each quarter, into Excel. I then simply convert it into my template as an Excel xlxs type file. This whole process only took about two or three minutes.

During the HMRC trial, the MTD software developer, myself and HMRC would have a video call and transfer my quarterly data. Again, in a trial situation, it only took five minutes or less to submit the quarterly return, and it went a dream from our end. You could say “easy peasy”.

It appears HMRC were also receiving my data perfectly. However, my MTD current tax due record didn’t appear to update correctly. After some four transmissions, HMRC didn’t get my record right and pulled the MTD trial because of their problems and not anything to do with us.

I felt sorry for the MTD developer, who was self employed, for having all his hard work put on hold for a couple of years before he could access an income stream from his hard work.

Nevertheless, I know there is nothing to fear and little additional expense needed to fully comply with HMRC rules when MTD returns.

My system allows me to set up and input my account entries digitally. Without any further manipulation I am able to extract that information digitally, simply convert it to Excel, at the click of a mouse, and then log on to the MTD package and transmit. Quite honestly, from completing my accounts entry to completing the transmission to HMRC took me no more than fifteen minutes.

It has taken me years of updating my original £19 package to a format where it is custom made to fully produce a bespoke report on 6th April each year, or whenever wanted, that can be used to provide the totals needed to directly transfer to your SA100. It also took me a while to set up the Excel template to my satisfaction.

We keep our accounts on Dropbox which is accessible to all of us to update and review. A copy is therefore kept on our PC’s and in the cloud. It can always be recovered along with backups at different time periods. All for free.

I also incurred a cost of about £30 two years ago to update my Excel version. I have no ongoing software costs or accountant fees, although I will probably incur a small quarterly/annual fee for the MTD transmission. JOB DONE!

Reply to the comment left by fairwood789 at 09/04/2024 - 14:47
Hi
would you be willing to share which accounting package you bought all those years ago and where I could buy it now.

I look forward to hearing from you.
Kind regards

John Webb