Making Tax Digital: 6 popular software options for your business

Paying tax may well be one of the oldest business obligations out there, but here in the UK the process is undergoing a very modern makeover – courtesy of the Making Tax Digital (MTD) regulation. 

For those of you that missed it, Making Tax Digital obliges all businesses that make more than £85,000 a year in revenue to maintain records and submit VAT returns digitally. 

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The regulation is already in force, so businesses that have not yet prepared for it need to get their ducks in a row pretty fast. Thankfully, the software market has responded and there is a broad range of options that will enable compliance. But which is the best option for your business? 

Here is our list of the most popular accounting software packages listed on the Capterra directory chosen by:

  • Rated 4+ stars by users on Capterra.co.uk
  • Listed by highest search volume in the UK
  • Are HMRC compliant for Making Tax Digital and listed on their website

Xero

Rating: 4.5/5

Ease of use: 4/5

Customer service: 4/5

Features: 4/5

Pricing: Starting at £10.00/month 

Free trial: Yes

Making Tax Digital Xero

Xero is rapidly growing its profile in the UK and building a reputation for ease of use, particularly when it comes to reconciling transactions. When it comes to Making Tax Digital, Xero offers a dedicated microsite that contains information on how to submit VAT records and also links to the HMRC page for further information.

Xero has also created a more detailed resource centre for Making Tax Digital, where accountants and bookkeepers can access free guides, toolkits and updates to help them and their clients become compliant using its software. 

To enable Xero for  Making Tax Digital, all customers need do is sign up with HMRC first and then activate Xero’s Making Tax Digital for VAT feature. From there, you will be able to post VAT returns in real-time, view and adjust VAT returns, access Xero’s bridging software and much more. 

QuickBooks 

Rating: 4.5/5

Ease of use: 4.5/5

Customer service: 4/5

Features: 4.5/5

Pricing: Starting at £12.00/month

Free trial: Yes

Making Tax Digital_QuickBooks

QuickBooks has long been a big name in UK accounting and the software regularly wins praise for its ease of use and cost-effectiveness. QuickBooks is also doing a big push around Making Tax Digital. In addition to free guides on the regulation, the company has also produced a short questionnaire to help businesses find out if they are compliant or not. If you have more complex questions you can even request a call-back from QuickBooks’ dedicated Making Tax Digital team.    

QuickBooks offers two ways to become Making Tax Digital compliant, which reflect the different needs of businesses. The first involves using bridging software to upload a spreadsheet with your nine-box VAT summary to QuickBooks before electronically filing securely to HMRC. The second option involves migrating your full accounts data to QuickBooks to track and calculate VAT automatically and has electronic filing capabilities. 

Zoho Books

Rating: 4.5/5

Ease of use: 4.5/5

Customer service: 4/5

Features: 4/5

Pricing: Starting at around £7.50/month  

Free trial: Yes

Making Tax Digital_Zoho Books

Zoho Books’s integration with CRM systems and its large range of built-in features has been praised by Capterra users.  

On its Making Tax Digital microsite, Zoho Books has created a short educational video around the regulation, which is well worth the watch. The site explains concisely how Zoho Books can help you achieve compliance and offers new customers 24/7 access to its support team to help make the transition from spreadsheets to digital software. The company also provides a general resources page where you can access more information and guidance around the regulation. 

To achieve Making Tax Digital compliance with Zoho Books, all users need do is choose the option to directly file returns through the software. However, this option can only be selected once a business has registered with HMRC for Making Tax Digital. From there, Zoho Books enables automatic HMRC compliant reports computation and direct VAT returns submissions. 

NetSuite

Rating: 4/5

Ease of use: 4/5

Customer service: 4/5

Features: 4/5

Pricing: Upon request

Free trial: No

Making Tax Digital

NetSuite is recognised as a truly enterprise-grade product that is perfect for SMEs that are aiming to grow into the big league. NetSuite has posted a useful blog that sets out how customers can achieve compliance with Making Tax Digital simply and rapidly. The company has also produced some supporting videos to help customers with their compliance preparations.

All that NetSuite customers need do is enable the International Tax Reports SuiteApp within the software package. Doing so allows the use of HMRC-compatible Making Tax Digital links and creates an HMRC VAT filing capability with audit trails.

FreshBooks

Rating: 4.5/5

Ease of use: 4.5/5

Customer service: 4.5/5

Features: 4.5/5

Pricing: Starting at around £12.00/month

Free trial: Yes

Making Tax Digital

FreshBooks is known as a quick and dependable suite for accounting with a great user interface and good service levels. As with most other providers listed here, FreshBooks is promoting its Making Tax Digital credentials. The company’s FAQ on the subject provides a very useful at-a-glance guide to the fundamentals of the regulation and walks readers through all the steps they need to take to sort out their Making Tax Digital compliance. 

FreshBooks enables compliance through its Making Tax Digital portal. Once customers have set up their Making Tax Digital portal and registered it with HMRC they’re ready to go. From the portal you can submit returns to the HMRC directly, view past submissions, access current liabilities and view your payment history. 

Deltek Vision

Rating: 4/5

Ease of use: 3.5/5

Customer service: 4/5

Features: 4/5

Pricing: Upon request

Free trial: No

Making Tax Digital _Deltek

Deltek Vision is a project-based solution for professional services firms and respected for its granularity and the resulting control it can give businesses. Deltek has published less content around Making Tax Digital, the company has included a Configuration Guide for Making Tax Digital

The process outlined by Deltek involves linking your WorkBook environment to HMRC through the company variables settings within the admin controls of the software. Once the link has been established, users can view, update, and submit Making Tax Digital compliant VAT returns. 

The information provided in the links above will give you all you need to learn more about Making Tax Digital and what each of the listed providers are doing around the regulation. 

However, before making your choice ,don’t forget to also check out our online reviews for each vendor. That way you can ensure that whatever software solution you decide to use, it will meet your needs exactly. Happy hunting!