A recent investigation into HMRC's official software list has found that a third of the products approved for the "Making Tax Digital" (MTD) initiative are currently unable to submit complete tax returns for landlords. This finding raises questions regarding the efficiency and scope of the digital solutions currently available on the market.
Out of a total of 128 approved software products, 44 either still have tax return functionality under development or do not offer it at all. This means that landlords using these specific products will continue to rely on additional tools or manual processes to fully comply with their tax obligations.
Challenges for Landlords and Software Providers
The "Making Tax Digital" initiative aims to simplify the tax return process through digitisation and reduce errors. However, the available data suggests that significant development steps are still required for the full implementation of this vision, particularly in the rental sector. The identified shortcomings could lead to additional effort and uncertainty for landlords, as they must ensure that their chosen software meets all necessary requirements.
For software providers, this means an ongoing need for adaptation and the necessity to expand the functionality of their products. The ability to submit comprehensive tax returns directly via MTD-compliant software is a crucial feature expected by users to fully benefit from digitisation.
Outlook and Recommendations
Given this situation, it is advisable for landlords to carefully check, when selecting MTD-compatible software, whether it offers all the necessary functions for their specific needs. It is recommended to study product descriptions thoroughly and, if necessary, consult with the software provider or a tax adviser. The full integration of all necessary tax functions remains an important criterion for the acceptance and efficiency of digital tax solutions.
- —Of 128 approved products, 44 lack full tax return functionality.
- —Development work on these functions is ongoing or not planned.
- —Landlords must pay attention to full functionality when selecting software.
