Setting up a business bank account, redirecting all rents into it, making sure each and every expense comes out of it i.e. getting and using a new credit card for that account, transferring over all my contractors’ payment details, telling utility companies, three different councils and the teax office that my bank details have changed plus tagging all transactions and then checking (because nothing is perfect right) that it’s all working as it should seems way harder than simply entering figures directly into MTD software as they arise. Seeing as I’ve been doing this for 27 years on a highly customised spreadsheet, it’s no extra work to do this via MTD software. Also, I can use the spreadsheet’s many formulas to act as a cross-reference to make sure all my figures are accurate.
Anyway, I thought you’d given me permission to do it my own way…
I only do my accounting once a year currently in order to get the figures for my SA.
I don’t particularly want to do that 4 times a year. As it takes me a while to work out all the rents and mortgages and expenses from the bank account.
Also I like the idea of everything going through one account and being completely ring fenced, I do accept obviously though that it’s a bit of effort to set up - i’m hoping to use the switching service which I think will change all my mortgage DDs over automatically, but I could be disappointed!
The software also does other useful stuff like holding tenancies and reminding me of gas cert dates and stuff - so this is an opportunity for me to do a major process upgrade.
I appreciate though that if you already have a smooth running ship then maybe just key the summary numbers into the MTD software - fair enough
Thank you I just looked at NRLA and it does sound good, it doesn’t specifically say on the web site that MTD will be included in the £5 product - unless I’m missing it?
The NRLA suggestion has quite good Karl, there’s some good info there.
It says you can now adopt a 3 line approach (if you turn over less than the Vat threshold £90K - no idea why it’s linked to that, especially as this government is rumoured to be changing it!)
So you don’t have to separate expenses out into all the different categories, which does make it easier
Ive test drove the NRLA Portfolio system, and the one problem I found was all expenses must be ‘allocated ‘ to a property
So in my case, where I’d be using it for Sole trader properties, and Ltd Co properties, you can allocate properties to each portfolio.
However, any expenses which are not ‘property specific’ have to be allocated to a property, If not, how would the system know which portfolio to allocate the expence to?
Agreed, I’ve fed it back, and their standard reply “The system is being improved all the time”. I will look again once the MTD digital bit is live, as I assume this issue must have been improved to make the system useful.
In the meantime, I’m using Hammock, but at £23 per month, I’d rather the Portfolio system @ £5pm be more suitable!
@tatemono I too have everything recorded on spreadsheets which I update every week and would be happier feeding in the figs manually every quarter. Have you identified a good software that does not require integration with your bank? Right now all rents and expenses come in and out of my current account.
Something I don’t see mentioned is that MTD quarterly submissions are overwritten by the latest submitted. So if you make a mistake, it’s not the end of the world.
You can make submissions as often as you like, as long as one is made after each quarter ends. So if you don’t have all the accurate expenses data to hand, it’s fine to submit what you do have.
Only the final submission will be used to create your tax calculation.
Found out an interesting development re my MTD processing.
As I mentioned above, I’m using Hammock for my rental portfolio’s. This is working well for record keeping, albeit I haven’t signed up to submit MTD returns early, so haven’t test drove that yet.
In addition to my rental portfolio, I also have solar panels installed on one of my rental properties, This has been reported to HMRC, as ‘self employment’ income, as that enabled tax relief on the original solar costs to be claimed when installed.
However, for MTD, I will have to do a separate second quarterly MTD return for the 4 quarterly feed-in tariff payments I receive each year. This can’t be included in the Hammock return, as HMRC expect each income stream to be repoorted separately. My accountant has recommended Sage basic for this purpose, which is free software.
This may affect others who have any other ‘self employent’ income in addition to their rental portfolio.
I’m a sole trader and have always just used Excel spreadsheets and ideally wanted to continue with that, so I’m opting for My Tax Digital which is free (and they claim there are no plans to charge in later years). You download a spreadsheet template which looks like the HMRC online self-assessment form, then add this as a new worksheet to your existing Excel records. You populate the fields on their form by linking to your records on the other worksheets. It’s by far the most straightforward software I found. I also looked at ClearBooks. They provide lots of features such as linking your bank account for automatic feed and scanning receipts, but there is no support with the free version so you have to muddle through on your own. If you just record rent coming in and your expenditure going out and only have a couple of flats, there is no need for all the fancy stuff.
I have a Monzo business account which I use for all my property transactions. Monzo have recently partnered with Sage to provide account holders with a MTD option so we will be able to make quarterly submissions straight from our bank accounts without the need for any other third party software. And it is free. For the last three years I have been managing two properties and use an accountant to submit my self assessment tax return to HMRC. I have studied what my accountant has done and it looks straight forward enough so going forward I plan to do it myself.
I had seen this & wondered how you would add transactions ‘not through Monzo?’. There are always the odd ones paid cash or using the wrong card. How does this work?
I assume if it’s Sage you add them in there & submit the return through Sage
