SmartPropertyManager.com & Making Tax Digital

Introduction to Making Tax Digital (MTD)

Making Tax Digital is a key part of the UK government’s plans to make it easier for individuals and businesses to get their tax right and keep on top of their affairs. The aim of the initiative is to make tax administration more effective, more efficient and easier for taxpayers, through the implementation of a fully digital tax system.

From 2019, VAT-registered businesses with a taxable turnover above the VAT threshold of £85,000 are now required to keep records digitally and to use software to submit their VAT returns through the Making Tax Digital service.

Making Tax Digital for property income tax will come into effect once the VAT scheme has finished a successful rollout. See the following HMRC guide for more details:

https://www.gov.uk/government/publications/making-tax-digital/overview-of-making-tax-digital

Who is affected by MTD?

If your business is VAT registered and your annual turnover is at least £85,000, you will likely need to submit your VAT returns under the MTD rules. There are some exemptions – refer to the HMRC guide above.

Businesses that are VAT registered, but whose turnover is less than £85,000, aren’t required to be part of MTD at this stage, but they can join it on a voluntary basis.

What does MTD actually mean for your business?

Under MTD you must keep all your VAT records in a digital format and submit the VAT return through MTD-compliant software. This is because HMRC want to reduce the number of human errors that happen when people manually type VAT figures into the form.

Apart from this, VAT returns will be due within the same timelines as before – for example, for quarterly returns this is seven days after the end of the month that follows the end of the VAT quarter – and VAT is payable as before – by electronic transfer, BACS, by direct debit or at a bank. 

How can SmartPropertyManager.com help?

If you are an active SmartPropertyManager.com user then you are almost there:

  • MTD requires all transactions to be recorded in a digital form. SmartPropertyManager.com has been helping its users do this since its inception.
  • MTD requires VAT returns to be submitted through the HMRC’s Making Tax Digital online APIs. SmartPropertyManager.com now supports this.
  • SmartPropertyManager.com has been reviewed by HMRC and is recognized as having met the requirements for MTD, so it can safely be used to submit VAT returns directly to HMRC.

If you are a VAT registered property management company in the UK, you can use SmartPropertyManager.com to keep digital records and then submit VAT returns directly to HMRC through the Making Tax Digital for VAT online gateway.

What next?

You can use SmartPropertyManager.com today to submit VAT returns through HMRC’s MTD gateway. Log into your account and go to the new UK VAT page under the Finances menu.

In addition, we are working on integrating with the Making Tax Digital gateway for Property Income Tax. We will be announcing more on this in 2020.

 

News – February 2019

Dear customers – this update describes some recent improvements we have made to the web site as part of the continuing effort to make it easier for you to manage your property portfolios.

Hope you find the information useful. As usual you can contact us if you have any questions.

Additional Improvements to Attachments

One of the most popular features of SmartPropertyManager.com is the ability to upload and save arbitrary files with your records as attachments, thereby allowing you to keep all your relevant information secure and always available online.

A number of improvements have been made in this area to make it more flexible and easier to use:

  • We have increased the maximum size for uploaded files – to 20Mb for regular customers, further still for Enterprise Edition customers.
  • The user interface for managing attachments has been tweaked to make it easier to see the size of attachments and the date and time they were uploaded.
  • When viewing a list of attachments, you can now click on a column headings to sort the list by that column.

See the following screenshot:

2019-attachment-columns-screenshot
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New Detail Reports

We have added two new detail reports:

  1. Property Detail Report – will show the full details of all your properties.
  2. Tenancy Detail Report – will show the full details of your tenancies.

Both reports support export to Excel and are accessible from the Reports menu.

Property Account page improvements

The Property Accounts page now has a new option to control which types of charge are reported in the income summary section. In particular, this makes it much easier to separate the reporting of deposit income versus rental income.

See the following screenshot:

2019-property-account-charges-screenshot
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News – August 2018

Dear customers – this update describes some recent improvements we have made to the web site and also an update on new GDPR legislation which come into effect this month.

Hope you find the information useful. As usual you can contact us if you have any questions.

GDPR

The EU General Data Protection Regulation (GDPR) is set to take effect on May 25, 2018. We have recently completed a review of the website to ensure we meet it’s requirements. For more information on the legislation and what it means, read the following blog:

SmartPropertyManager.com & GDPR

Tax Worksheet updated with final 2017-2018 Section 24 changes

From April 2017, HMRC are restricting the finance cost relief for individual landlords on residential properties to the basic rate of income tax. The restriction will be introduced in stages from 2017 through to 2021 and will apply mostly to individual landlords (not companies) who manage residential properties and who pay higher rate tax.

In December we pre-emptively made changes to the tax worksheet in order to take into account the new rules for financial cost relief from 2017 onwards.

With the release of the final SA105 form in April 2018, we have now updated the tax worksheet to reflect the final published layout and guidelines.

The following screenshot shows the lower part of the detailed calculations section of the tax worksheet which now matches exactly the format used by HMRC SA105 form:


2017-tax-worksheet
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These fields are calculated as follows:

Field Description
A. Non-residential loan interest and other financial costs The total expenditure your business has incurred for financial costs such as loan interest on non-residential property. Specifically, this aggregates all transactions in the financial period with tax category Loan interest & finance costs (Non-residential property).
B. Residential loan interest and other financial costs The total expenditure your business has incurred for financial costs such as loan interest on residential property. Specifically, this aggregates all transactions in the financial period with tax category Loan interest & finance costs (Residential property).
C. Residential finance costs that can be claimed as an expense The proportion of the residential finance costs that can be claimed as an expense. The percentage used to calculate the proportion will reduce in stages between 2017 through to 2021.
D. Residential finance costs that cannot be claimed as an expense The proportion of residential finance costs that cannot be claimed as an expense. These finance costs can be claimed as a reduction on your income tax liability at the basic rate of tax (currently 20%). Refer to the HMRC guidelines for further details.
E. Total finance costs that can be claimed as an expense The full amount to be claimed as an expense, calculated as the sum of non-residential finance costs (box A) and the proportion of residential finance costs that can be claimed as an expense (box C).

For full details of the changes to finance cost relief see the following HMRC publications:

 

News – March 2018

Hello to all our valuable customers! This update describes some recent improvements we have made to the web site. Hope you find them useful.

Ability to record arbitrary types of transactions

Previously, SmartPropertyManager.com only supported two types of financial transactions – income and expenditure. This was fine for the bulk of financial information that needs to be recorded as part of a property business, but was a little unintuitive for certain types of financial transactions – for example, recording income from a third party that was not a tenant or a landlord, or distinguishing the beneficiary of income in context of a property unit that you manage for a client landlord (the beneficiary may be the landlord or it may be yourself as the property manager).

Hence, we recently added the ability to record arbitrary types of financial transactions. On many of the financial statement pages you will now see an additional link called ‘Record Other Transaction’ as shown in the following screenshot:


spm-statements-general-transactions

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Clicking on the link shows a slightly modified version of the regular transaction dialog – the main difference being that you can explicitly control the source and target financial parties for the transaction. The ‘From’ field let’s you choose the financial party from which the transaction is paid. The ‘To’ field let’s you choose the financial party to which the transaction is paid. These two financial parties can be your business, a tenancy or any organization such as a supplier, an agent or a landlord.

See the following screenshot:


spm-statements-general-transactions

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Refer to the help for more information and for examples of usage.

Simplified attachments user interface

We have made a couple of improvements to the attachments dialog to make it easier to use. It is now possible to add attachments directly from the attachments dialog and to add multiple attachments at the same time. The following screenshot shows the updated attachments dialog:


spm-attachments

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Ability to export or email Open Tenancy balances

The home page dashboard has always contained a panel showing a summary of open tenancies, including key details such as next payment due and balance. The panel now has options to more easily share the summary of open tenants – either by emailing it or exporting to excel.

See the following screenshot:


rent next due export

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Clicking on the cog icon in the top-right corner of the Open Tenancies section shows a pop-up menu which allows you to export or email an excel file with the open tenancy details.

 

News – December 2017

Hello to all our customers! We have recently updated the web site to reflect legislative changes to the way in which financial cost relief is applied for tax returns of individual landlords.

Tax Worksheet updated with 2017-2018 Section 24 changes

We have updated the tax worksheet to take into account the new rules for financial cost relief from 2017 onwards.

In a nutshell, from April 2017, HMRC are restricting the finance cost relief for individual landlords on residential properties to the basic rate of income tax. The restriction will be introduced in stages from 2017 through to 2021 and will apply mostly to individual landlords (not companies) who manage residential properties and who pay higher rate tax.

The following screenshot shows the additional calculations displayed on the tax worksheet for financial periods after 6/Apr/2017:


2017-tax-worksheet

[Tip: click image to enlarge]

The detailed calculations section of the tax worksheet displays details of how Finance Cost Relief is calculated for your business as follows:

Field Description
F1. Total finance costs The total expenditure your business has incurred for financial costs such as loan interest. Specifically, this aggregates all transactions in the financial period with tax category ‘Loan interest and other financial costs’.
F2. Percentage to deduct from property income The percentage of the total finance costs that can be deducted from property income for the period in question.
F3. Amount to deduct from property income The actual amount that can be deducted from property income – i.e. F1 divided by F2 x 100. This figure will be inserted into box 26 of the tax worksheet
F4. Amount to claim using basic rate tax The remainder of the finance costs which can be claimed as a reduction from your income tax liability at the basic rate of tax (currently 20%). Refer to the HMRC guidelines for further details.

The way to claim this amount will be clarified once HMRC publish the 2017/2018 self-assessment forms.

Some important notes:

  • The finance cost relief section of the tax worksheet is provisional until HMRC publish full details of the final SA105 form for 2017/2018.

 

For further details see the following HMRC publications:

News – June 2017

Hello to all our customers! A brief update on changes we have recently made to SmartPropertyManager.com:

Customisable home page

Following on from recent improvements to the general look and feel of the web site, we have now added the ability to customise the appearance of the home page in a number of ways.

The following screenshot shows the various ways in which the home page can be customised. Read on for more details.

2017-home-page-customization

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Walking through each of the allowable customisations:

  • Show or hide the side bar by clicking on the horizontal bars icon in the top-left corner of the page.
  • Collapse or expand individual panels by clicking on the minus/plus icon in the top-right of each panel.
  • Show or hide panels by accessing the Customise Home Page dialog from the page settings sub-menu in the top-right hand corner of the page.
  • Re-arrange the location of panels by dragging and dropping them into the desired location on the home page.
  • Customise the content of individual panels by clicking on the cog icon in the top-right hand corner of the panel.

The web site will conveniently remember your customisations and reapply them the next time you access the home page.

Single downloadable help manual

The help manual can now be viewed as a full single page. To access it, go to any help page, go to the contents and then scroll to the bottom – as shown in the following screenshot:

2017-help-single-page

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Useful hint: Many modern browsers support printing to PDF so you can go to the single page view and then print to PDF to get an easily downloadable PDF file containing all SmartPropertyManager’s help content.

Improved support for new internet domains

SmartPropertyManager.com now recognises and allows use of email addresses in new top-level internet domains, e.g. @business, @realtor, @property.

Additional Improvements

  • We’ve made some changes under the covers to minimise the amount of content that needs to be generated which means that most pages now display more quickly than before.
  • A few tweaks have been made to make printable page views print more visually appealing and simpler.

News – January 2017

Happy New Year to all our customers! A brief update on a few changes we have recently made to the web site:

Refreshed Look and Feel

As most customers have already noticed, we have refreshed the look and feel of the application to make it look more modern and to also make it easier to use on touch screen devices such as tablets. See the screenshot below for a flavour of the new look.

201701-home

 

A couple of notes:

  • You can switch back to the previous classic look using the link called ‘Use the classic theme’ on the left hand side of the home page. However, please be aware that the classic theme will be permanently removed in the near future.
  • Additional changes are lined up later this spring to continue improving the look and usability of the web site.

If there are additional look and feel changes you think we can make or if there is something that is making it difficult to use the new look then please let us know through the regular contact page.

Smarter defaulting when entering transactions

The system now performs smarter defaulting when entering new transaction records. When the supplier is selected for expenditure records, the system will default the transaction category, the tax category and the VAT rate to the values last used for that supplier.

You can switch this behaviour on or off through your preferences in user settings.

 

Uploading of attachments using drag and drop

There are now two ways to upload new attachments in the Add Attachment dialog as shown in the screenshot below:

  1. Click on the Choose button to display your native operating system file chooser and select one or more files to upload.
  2. Find the files using the regular Windows explorer (or equivalent for other platforms) and drag and drop the files into the Add Attachment dialog.

 

201701-add-attachment