Monday, December 16, 2013

FreeAgent will move into tax preparation when it launches a new module capable of compiling and filing self assessment tax returns.

 John Stokdyk for AccountingWeb UK writes: The cloud accounting application FreeAgent Central will move into tax preparation in January when it launches a new module capable of compiling and filing self assessment tax returns.
The program, which won AccountingWEB’s 2013Software Satisfaction Award for small business accounts, is widely used by sole traders, freelancers, contractors and one-person limited companies. The new feature has already received a warm welcome from this group, but FreeAgent is also pitching it at the accounting profession as a mechanism to manage freelance clients’ accounts and returns during the busy self assessement deadline rush in January.
There will be no extra charge for the service, which is bundled into the web-based system.
“This is us trying to get something out there to help with SA season,” said FreeAgent founder Ed Molyneux. “We realise how under the cosh accountants are in January. This is a tool they can offer the client during the last minute rush.”
Extending FreeAgent into personal tax was always part of the company’s agenda for “frictionless compliance”, he explained.
“Our idea was that you should be able to do everything you need in FreeAgent. If you have all the accounting data in a system that lends itself to automation, why not use it? We’re just getting to the point where we can do that.”
The FreeAgent module will pre-populate around 90% of the fields in the self-employment return, and includes an on-screen version of the tax return for users or their accountants to complete the rest. The timing of the SA module is designed to help with the January SA rush, but property forms, limited companies and corporation tax facilities are all on its development roadmap.
“We’re not limiting ourselves to what accounting software should be,” said Molyneux. “Our users track income, manage banks and need to file tax returns. There’s no distinction in their mind that one product stops here and another starts there. They’ve got a job to do. Our focus led us to wrap this all together, because that’s the best way to deliver an overall solution rather than an arbitrary division.
“We can already do a P&L, so it makes sense to do that so you can submit it alongside the corporation tax return. We have most of the numbers already and it’s much shorter form.”
Because FreeAgent already uses iXBRL to define its accounting data fields, CT return functionality and filing should be fairly simple to achieve. “It’s just another function, let’s just wrap it up,” he said.
While the product is focused on the needs of freelancers and contractors, Molyneux assured tax professionals that the software was not designed to lure away their clients. “This is as much about the workflow of the accountant as the client. When we talk to our customers about their tax returns, very few say they’ll do it on their own. They want someone to look over it for them. So [the SA functionality] is about collaborating with accountants and clients to streamline the process,” he said.
“We’re not trying to compete with the IRIS, CCH and Digita that’s too difficult. We can’t do all tax software for all situations, but we can do something for our subset of the market. The value is connecting that to the accounts system. That’s achievable and worth trying to do and sit alongside the more capable tools in the market.”


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