Do I need Quickbooks?

[Stormtaster]

Sole trader with no work at the moment in the UK. Some small amounts overseas none guaranteed. Tough times. Not VAT registered, T/O unknown, estimated maybe 35k UK.

My accountant presented me with an eye watering self assessment bill which has kept me awake at night.

I suffer with PPD and GAD and slight dyscalculia - not the best times.

My accountant is saying that with MTD - I now need to move to Quickbooks and store everything digitally and revert from traditional S/A methods.

Can I just check that every single freelancer, self assessment individual must now operate using Quickbooks or other approved software to stay on the right side of things?

 

[Paul Kelly ICHYB]

Unless I am mistaken, as you are not VAT registered, you do not need to use MTD.

QB is OK, but there are other options. FreeAgent is free if you have a NatWest/Mettle business bank account.

 

[Stormtaster]

So an accountant can still use traditional methods of S/A preparations? I wonder why so many accountants appear to be insisting on my switching across, stating its all part of new HMRC rules?

 

[Paul Kelly ICHYB]

You need to file online, but you do not need accounting software to do this.... YET!

An accountant will probably have an online system, maybe even Quickbooks (which they might resell to you).

 

[UK Contractor Accountant]

I wonder why so many accountants appear to be insisting on my switching across, stating its all part of new HMRC rules?

Coming in soon will be HMRC requirement to file quarterly Tax Returns which will have to be submitted to digitally which is why your Accountants are suggesting now is good time to keep your accounting records digitally either in the form of book-keeping software (e.g QB, Sage, FreeAgent, Kashflow, ClearBooks, Xero, QuickFile etc) or spreadsheets with a bit of software added to provide the digital link up to HMRC systems.

 

[Stormtaster]

OK thank you this is helpful for my condition

The accountant claims to also seem to be under stress with relation to the new rules? and registrations and putting people on the new "system" does this also ring true and fair? They mentioned something about extra period issues on my current return which I have checked and appears to be more work for the accountants.

I am fine to go on to what ever my acc suggests, but still quite traumatised by the costs associated with the new "filing" and "set up" but the costs concern me and like to be well informed.

The quarterly thing in due course is definitely something that makes me consider PAYE and so maybe I should see a couple of accountants and my own. Filing quartely as a freelancer rather suggests more efficient practices in being a LTD company.

Anyway I appreciate your help. Not fun having to second guess everything. Yes I have made appointment to see my MH Dr.

 

[MyAccountantOnline]

Sole trader with no work at the moment in the UK. Some small amounts overseas none guaranteed. Tough times. Not VAT registered, T/O unknown, estimated maybe 35k UK.

My accountant presented me with an eye watering self assessment bill which has kept me awake at night.

I suffer with PPD and GAD and slight dyscalculia - not the best times.

My accountant is saying that with MTD - I now need to move to Quickbooks and store everything digitally and revert from traditional S/A methods.

Can I just check that every single freelancer, self assessment individual must now operate using Quickbooks or other approved software to stay on the right side of things?

Making Tax Digital isn't a requirement yet and wont be for sometime however I think your accountant is giving you good advice to use software now.

QuickBooks is just one of many software packages you can use though - you have a huge choice.

If you want to read up on Making Tax DIgital have a look here -

Making Tax Digital for Income Tax

Find out how to use Making Tax Digital for Income Tax, including step by step guidance for sole traders, landlords, and their agents.

www.gov.uk

 

[MyAccountantOnline]

....

My accountant presented me with an eye watering self assessment bill which has kept me awake at night.

...

Using some good software will also help avoid that - if you record all transactions and keep your records up to date your accountant will be able to tell you roughly how much your tax bill will be throughout the year.

 

[UK Contractor Accountant]

My accountant presented me with an eye watering self assessment bill which has kept me awake at night.

suggest you get your 2024 tax return completed and filed asap if your income is down compared to last tax year as this will reduce your tax payment due on account in July 24 which is currently based on your 2023 tax year earnings.

 

[Stormtaster]

Yes he has done that and he noted my first 3 months has been near nil.

What is this "new system" and "getting everyone on the new system"??? Are all accountants under the cosh to register all their clients to a new system? Or are they referring to the new rules?

Yes my spreadsheets are all detailed and itemised I also present a 'guide' line end summary of operating costs and income. I was with him 20 years - last time I got a massive no warning bill from an accountant I left.

Bottom line, traumatic if you have to second guess your financial business partner. They are also too busy atm to help me with questions, despite knowing i have severe PPD.

 

[MyAccountantOnline]

...

What is this "new system" and "getting everyone on the new system"??? Are all accountants under the cosh to register all their clients to a new system? Or are they referring to the new rules?

....

The new system is called Making Tax Digital do have a read here it explains what it is.

Not quite sure what you mean by under the cosh and no we dont have to register our clients - any good accountant will do their best to help clients adhere to all necessary rules though.

 

[TheSkyisGray]

When you say there are extra period issues, is this because sole traders are moving to a 31 March/5 April year end? Did you have a different year end before? This may be why your tax bill is higher or maybe I have misunderstood.

 

[Stormtaster]

yes that is correct - thanks for your kind input so far everyone. Good forum. No trolls.

 

[Stormtaster]

When you say there are extra period issues, is this because sole traders are moving to a 31 March/5 April year end? Did you have a different year end before? This may be why your tax bill is higher or maybe I have misunderstood.

Not tax bill - their bill! Liability was fine - Yes extending the tax year.

 

[TheSkyisGray]

Not tax bill - their bill! Liability was fine - Yes extending the tax year.

Well maybe they mean that, if you use software, then their fees would be lower. Were the fees agreed in advance?

 

[Stormtaster]

Well maybe they mean that, if you use software, then their fees would be lower. Were the fees agreed in advance?

Nope just presented with a bill. Considering QB is £2.50 a month that would be a stretch

 

[TheSkyisGray]

Nope just presented with a bill. Considering QB is £2.50 a month that would be a stretch

But the time spent by your accountant may be less so the fees less. Just a suggestion as to why you may wish to move to software. I would only move clients if it benefitted them. There is no HMRC requirement to move and there may never be.

Is the bill itemised? Was it more work as effectively two periods?

 

[Stormtaster]

Well maybe they mean that, if you use software, then their fees would be lower. Were the fees agreed in advance?

But the time spent by your accountant may be less so the fees less. Just a suggestion as to why you may wish to move to software. I would only move clients if it benefitted them. There is no HMRC requirement to move and there may never be.

Is the bill itemised? Was it more work as effectively two periods?

Yes it was - where there two periods? I thought it was another 3 months and thus making a 12 month year end to a 15 month year no?

 

[TheSkyisGray]

Yes it was - where there two periods? I thought it was another 3 months and thus making a 12 month year end to a 15 month year no?

Maybe, if your year end was December. I have a few of these as 23-24 is a transitional year but am not charging extra (they use software or bookkeepers so it is still one tax return).

If you think the fee is higher than you were expecting then ask the accountant the reasons as I am only guessing.