Making tax digital - software for sole traders etc

[happysteve]

Eh up

Sole trader (not Limited), I do cash basis and my tax affairs are very simple, so I do everything myself on a spreadsheet and submit the numbers online for self-assessment.

I'll be required to use software as part of the UK government's "Making Tax Digital" drive.

There's gov.uk list of software and there are LOTS. Some say "Free" but usually they're only free:
- for a trial period
- if you have a specific bank's business account

At a quick look I can't see anything that's open source and/or genuinely free

I guess I will have to pay for this inconvenience, more costs to pass on...

I don't need anything fancy. I don't need it to do invoices, I'm happy to just type everything in (like I currently do into a spreadsheet).

Anyone got any advice for something simple, reasonably priced etc? Needs to work on a Mac.

Thanks in advance!

 

[Pretty Mouth]

I've just started to look into this. It sounds like our tax affairs are similar, so I'll likely be looking for the same sort of software that you are.

From what I can make out (disclaimer, I could be wrong!), we may be able to continue using a spreadsheet for record keeping, and use bridging software for the quarterly updates (some of the listed software is 'record keeping', some 'bridging', some both). Also I think a lot of the software is web browser based, so I think it should work whatever the operating system (I hope so, I use linux).

I believe Zoho books will be free, though this isn't ready for income tax just yet, though it's in development. Whether it will be any good or suitable for our needs I cannot say I'm afraid.

My record keeping and returns is currently fairly painless, I'd written a list of instructions to follow to do it all, and I only really have to spend a day or so each year on it. It'll be a nuisance having to learn new software, doing updates each quarter and so on.

 

[plugsandsparks]

What tax are you wanting to pay, e.g. for VAT i use MSFT Spreadsheet and an add-on called ANNA MTD, free

 

[happysteve]

I've just started to look into this. It sounds like our tax affairs are similar, so I'll likely be looking for the same sort of software that you are.

From what I can make out (disclaimer, I could be wrong!), we may be able to continue using a spreadsheet for record keeping, and use bridging software for the quarterly updates (some of the listed software is 'record keeping', some 'bridging', some both). Also I think a lot of the software is web browser based, so I think it should work whatever the operating system (I hope so, I use linux).

I believe Zoho books will be free, though this isn't ready for income tax just yet, though it's in development. Whether it will be any good or suitable for our needs I cannot say I'm afraid.

My record keeping and returns is currently fairly painless, I'd written a list of instructions to follow to do it all, and I only really have to spend a day or so each year on it. It'll be a nuisance having to learn new software, doing updates each quarter and so on.

Yep, sounds very very similar to my setup Pretty Mouth.

The "bridging" thing is a really good tip, thanks for that (and potentially Zoho), and wasn't aware many of them were browser based. So thanks very much for your reply!

What tax are you wanting to pay, e.g. for VAT i use MSFT Spreadsheet and an add-on called ANNA MTD, free

No VAT (I'm below the threshold), just income and expenses from the business, and a few quid from savings.

Thanks for the tip about what you use plugsandsparks, I'll look into that

 

[plugsandsparks]

VATs been digital for a few years now, still clinging on to free stuff. However i think my next Corporation tax is also going to be digital, the normal handball method ceases to be available from March 2026, in theory i can get another submission in. So i am also looking for S/W :-(

 

[plugsandsparks]

ANNA MTD have started charging £3.50/submission. Have just tried Best Free MTD VAT Bridging Software for Excel - https://www.comsci.co.uk/100PcVatFreeBridge, and its actually better for my setup as i can go straight from quickbooks VAT calculation, create a spreadsheet and submit from their app using the spreadsheet without any cutting and pasting, all good

 

[HappyHippyDad]

Thanks for this thread @happysteve , I have a feeling the thread is going to get longer and longer over the next year

I'm just starting to get a little nervy over the MTD thing.

I was planning on sitting down for the day and researching it, as I literally have no idea what it means.

I just fill out my tax return each year, one figure for invoices, one for expenses. Even the fact that 'spreadsheets' have been talked about in the above posts confuses me. What is in this spreadsheet if you are just a simple sole trader, not VAT registered and especially if you use 'cash basis' (i.e just one figure for all your expenses). I just add up all my receipts (and other expenses) and put one figure in the tax return.

Anyway, my question this time is 'Do i actually need to do it this year'? The HMRC site says you have to use MTD 'If you have qualifying income over £50,000 from April 2026.

Does this mean I have to start using MTD in April 2026 (meaning I am using figures from April 2025-2026), or does it mean qualifying income between 2026-27, meaning it is the following years tax return?

Basically, I could fill out my normal tax return now for the year 2024-25. Will MTD begin for 2025-26 income or 2026-27 income (assuming I am over £50,000)?

 

[UNG]

Once income tax goes over to MTD I think that will be my cue to retire
Up until 18 months ago my son was working on the back office software for it and from his comments I'm not sure they will hit the targets as they are trying to recuit developers whilst offering below the industry level salaries. He left as HMRC took a wholly owned in house company into the civil service and the pay grades dropped which meant any career progression for him would have resulted in a pay cut so he left and took a decent pay rise

 

[Pretty Mouth]

Thanks for this thread @happysteve , I have a feeling the thread is going to get longer and longer over the next year

I'm just starting to get a little nervy over the MTD thing.

I was planning on sitting down for the day and researching it, as I literally have no idea what it means.

I just fill out my tax return each year, one figure for invoices, one for expenses. Even the fact that 'spreadsheets' have been talked about in the above posts confuses me. What is in this spreadsheet if you are just a simple sole trader, not VAT registered and especially if you use 'cash basis' (i.e just one figure for all your expenses). I just add up all my receipts (and other expenses) and put one figure in the tax return.

Anyway, my question this time is 'Do i actually need to do it this year'? The HMRC site says you have to use MTD 'If you have qualifying income over £50,000 from April 2026.

Does this mean I have to start using MTD in April 2026 (meaning I am using figures from April 2025-2026), or does it mean qualifying income between 2026-27, meaning it is the following years tax return?

Basically, I could fill out my normal tax return now for the year 2024-25. Will MTD begin for 2025-26 income or 2026-27 income (assuming I am over £50,000)?

It's not very clear what is expected of us is it?

If your turnover for 2024-25 is £50k+ then you have to register for it by 1 April 2026 (i think that date's right, you'll want to check it though), and start 'using it' from April 6 2026. I don't know exactly what 'using it' means though.

Your other questions I cannot answer definitively I'm afraid.