MTD Software for Performers – What to Use and Why It Matters – Performance Accountancy

In this video, we’re looking at software options for Making Tax Digital, and how to decide what’s right for you as a performer.

Quite often, there isn’t a perfect system for everybody. It’s more a case of finding the one that’s the least annoying for you to use.

One option is to stick with an Excel spreadsheet. You can record your income, your expenses, and make sure all the relevant details are included, such as the date, supplier, description, and amount.

If you go down this route, you’ll also need bridging software to sit on top of the spreadsheet, so it can communicate with HMRC and submit the required totals.

The downside is that spreadsheets can be prone to error. If you’re not confident with formulas or setting things up correctly, mistakes can happen. Something as simple as entering £220 instead of £2.20 can cause issues.

So you need to be organised and comfortable using Excel. If not, you may need someone to help you manage it.

One advantage is that it doesn’t require you to connect your bank account, which some people prefer.

We’ve spent a lot of time reviewing software options and have narrowed it down to a few that we think work well for our clients.

The first is Untied. This works particularly well if you have multiple income streams, such as self-employment and property income.

It’s also multi-currency, which is useful if you work abroad or receive income in different currencies.

A key benefit is that you only need to tag your business transactions. So if you have 200 transactions in a month but only 20 relate to your business, you just tag those 20, and the rest are ignored.

When it comes to quarterly updates, only those business transactions are submitted to HMRC.

Another option is Xero. This is more of a full accounting package.

There are different levels, including Xero Simple, which is suitable if you don’t need to raise invoices or upload receipts. However, you do need to tag every transaction from your bank feed.

If you need more functionality, you can move up to Xero Ignite or Xero Comprehensive. The more advanced versions allow for additional features, including handling multiple income streams and foreign currency, but they do come at a higher cost.

Xero can be tailored to your needs, but you’ll likely need help setting it up correctly, especially if you want it to reflect your specific work as a performer.

We also have Dext Solo. This is something we’re still testing, but it may be suitable for smaller clients, particularly those approaching the MTD threshold.

FreeAgent is another option. It can be free if you have a NatWest business account, otherwise there is a monthly cost.

It works well as an accounting system, but if you have both property and self-employment income, you may need separate licences.

There are plenty of other options as well, including Zoho Books, QuickBooks, Sage, and others.

Ultimately, the choice comes down to what works best for you. The right system is the one that helps you stay organised and makes the process as simple as possible.

If you’d like help choosing or setting up software for Making Tax Digital, feel free to get in touch.