Making Tax Digital - how much does it cost?!

[stonkytonk11]

My husband is self employed and is now being charged £180 a month! For an accountant to keep
on top of this new digital tax scheme - how can it be this much, does anyone know if this is a standard cost?

What is the accountant actually doing for that money? Is there a reason he can’t do his own accounts?

Your DH needs to find himself a new accountant.

I pay £120 a year for mine. I mostly do all my own figures, she just checks them and submits them for me. She has access to all my software etc.

Some business bank accounts come with free software. Nat west does. Might be worth looking into

MTD is a lot of work and expense for accountants who have had to invest in additional software and resources to comply with it.

What's his income?

I assume that your income is extremely low and below the MTD threshold?

Currently below MTD but I already use all the software (completely free with my free business bank account). I'm sure the price will go up slightly when I qualify but £180 a month is an absolutely ridiculous price.

No, what's ridiculous is to dismiss a fee as too high without any knowledge of the scale or complexity of the work involved. £1,800 + VAT pa is a pretty low and reasonable fee for anyone whose affairs are complicated enough to need an accountant. To put that in context, you would get about 15 minutes of a partner's time for £150 + VAT in any medium-sized firm.

I doubt that anyone charging £100 + VAT is doing any more than data entry. That fee does not allow for any kind of review or risk management or advice. Are they qualified? You're still ultimately responsible for the return even if an agent submits it for you, so if you're keeping your own software why not just submit it yourself?

If you are a sole trader with a fairly simple setup there is free software available.

His income is about 60k gross. He is not keen on doing it himself and has had an account to do tax returns for the last few years (at a cost of around £350 twice a year) This extra cost seems so high

Yes, of course she's qualified

And I use her because I am not an expert and maths isn't my strong suit, so I'm happy to pay someone else to go over all my figures and make sure I haven't made any silly errors or mistakes.

I still maintain that £1800 a year is ridiculously expensive. You're of course free to disagree.

My husband spends £5 a month for the software linked straight to his account. The ‘accountant’ is taking the mick. Also as a chartered tax adviser, accountants don’t necessarily know tax rules. 2 very different things!

How does he record income & expenses and how does he give the info to the accountant?

If he uses compatible accounting software that the accountant can access then £180pcm is far too much
If he is (like my BIL) insisting on sending the accountant a spreadsheet every month/quarter and letting them deal with the bridging then it looks a lot more reasonable

How long is a piece of string? It's all time related. If the OP's husband does pretty good book-keeping on an approved accounting package, and keeps it accurate and up to date, he should be able to do the submissions himself without needing an accountant. If he wants an accountant to look it over before pressing the submit button, that would be pretty cheap. BUT, if he doesn't keep good records and wants the accountant to either enter all his transactions (i.e. book-keeping) or sort out a mess, make corrections, etc., then it's going to be a lot more time consuming and therefore expensive. Personally I don't think the price is excessive for the latter, but ridiculously expensive for the former.

Yes, but it's extra work, 4 times per year ON TOP of the usual yearly work, so 5 submissions instead of 1.

Is he sole trader?

I just to it myself

exactly!
also if the current yearly charge is £700 for a £60k turnover sole trader i'd put money on the records being a mess.

OP - it may be worth asking the accountant if your H can change how he keeps his records to bring down the cost. Otherwise you'll end up paying the luddite surcharge whichever accountant you use