Five key takeaways from our ‘On Target for 2021: FreeAgent Partner Update’ virtual event

Important: This blog post was published before the government announced that MTD for ITSA will be delayed until 2026. Some of the information below is no longer accurate.

Yesterday, we hosted a live virtual event where we took a closer look at the next wave of Making Tax Digital (MTD), discussed some of our recent product updates and revealed what we’ve got in store for 2021. In case you missed the event, here’s a rundown of the key takeaways.

1. The state of play for small business clients

Nick Longden, FreeAgent’s VP of Sales, began by sharing some statistics about the current state of play for UK businesses and, in particular, the number of businesses that have started up during the coronavirus (Covid-19) pandemic.

According to Companies House and Office for National Statistics, 15,268 company incorporations occurred in the week ending Friday 23rd October 2020. This figure was 22% higher than the same week in 2019 (12,487). Nick highlighted that this increase has been a consistent trend over the past five months.

With so many new startups, there is now both added opportunity and pressure for practices, who’ll need to support many of these new business owners.

2. Responding to your feedback

Nick talked about FreeAgent’s most recent Net Promoter Score (NPS). Practices gave FreeAgent an NPS of 56 in October 2020, an excellent result in comparison to benchmark data.

Feedback from our most recent NPS survey for practices suggested that our positive score was largely due to FreeAgent’s ease of use for clients and intuitive interface, as well as our recent practice-focused product updates. You can learn more about these updates on our timeline.

3. The road ahead

Kevin Lord, FreeAgent’s Head of Practice Enablement, revealed the three major pieces of work on our product roadmap for 2021 that we’re most excited about:

Audit Trail report

Kevin confirmed that we’ll be adding support for expenses, bills, journals and other data types to our recently-launched Audit Trail report over the coming months.

Filing year-end accounts

Now that we‘ve launched the Final Accounts report and form CT600 in FreeAgent, our plan is to allow you to file your clients’ year-end company accounts directly to HMRC and Companies House in 2021.

Kevin was joined by FreeAgent’s Group Product Manager, George Grigolava, who walked attendees through our initial plans for the filing feature, including an integrated e-signature capture. This functionality will allow your clients to approve their accounts before you file them.

Cashflow

In a recent survey from the Office for National Statistics, 4% of businesses that had not permanently stopped trading said that they had no cash reserves and 39% said that they had less than six months’ worth. A further 22% said that they were not sure how long their cash reserves would last.

With cashflow such an important topic right now, we’re exploring how a cashflow tool within FreeAgent could help your small business clients plan ahead and give them visibility of any potential shortfalls in their near-term future. We’ll have more news on this in the coming months.

4. Helpful integrations

Matt Perkins, FreeAgent’s Senior Partnerships Manager, discussed how practices and their clients can use our integration partnerships to pivot their businesses during the current economic challenges. Matt’s talk covered the following areas:

Moving businesses online

Matt highlighted how a number of our integration partnerships can help clients move their businesses online. Smart booking tool Appointedd allows clients to provide their customers with a self-service booking option, while Point of Sale solution Goodtill can help to reduce in-person contact for your clients in the food and beverage and hospitality industries.

Automating accounts payable

Between helping clients adapt to new ways of working and keeping them updated on recent announcements from the government, time is in short supply for accountants and bookkeepers.

Matt provided an overview of pre-accounting tools AutoEntry and Receipt Bank, which use optical character recognition (OCR) and artificial intelligence (AI) to import your clients’ receipts, expenses and bills into FreeAgent. This can help you to automate your data entry quickly and accurately, removing the risk of manual errors in the process.

Getting paid

If any of your small business clients’ customers encounter credit issues, some of our integration partnerships might be able to help:

• GoCardless makes it easy for small business clients to collect Direct Debit payments from their customers worldwide.
• Invoice insurance provider Nimbla has a credit insight feature that can analyse your clients’ FreeAgent invoices to assess a customer’s credit risk.

5. What to expect from the next phase of MTD

HMRC has announced that MTD is to be extended to cover all UK VAT-registered businesses from April 2022 and to include Income Tax from April 2024.

Verna Gellvear from HMRC attended yesterday’s event to talk attendees through the MTD timeline so far and to share some interesting statistics from the first wave of the rollout of the initiative. According to Verna, over 6.5 million VAT returns have been successfully submitted through the MTD service and over 30% of non-mandated businesses have signed up to submit MTD VAT returns voluntarily.

Verna then made two exclusive announcements from HMRC:

• The Making Tax Digital CT (Corporation Tax) open consultation is now live. You can find out more about the consultation and how to respond on the government’s website.
• In March 2021, your clients’ records will be moving to HMRC’s new Enterprise Tax Management System. This means that agents will no longer be able to make submissions using the XML facility and must instead set up Agent Services Accounts and then copy across their relationships from the previous agent portal.

Following Verna’s announcement, George Grigolava provided his top tips for practices on preparing for the next phase of MTD. George recommended that practices define their MTD strategy, flagging two potential routes: acquiring new clients and ensuring compliance for existing clients.

George also emphasised the importance of planning early. Accountants and bookkeepers have a number of steps to complete in order to prepare their practices and clients for MTD and should avoid having to do this at the last minute.

We plan to keep you updated with all the latest MTD news, so keep an eye out for new blog posts in the coming months. Alternatively, speak to your FreeAgent contact to see how we can help you and your clients prepare for the next wave of MTD.