Chartered Tax Advisers & Accountants

My Making Tax Digital Blog Part II, free trial, FreeAgent plus some more cynicism

Published On: 25 April 2017
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Hopefully you’ll recall in my earlier blog, I’m taking part in HMRC’s pilot to evaluate the MTD software that businesses like mine – and if you’re self-employed then almost certainly yours too – are going to a have to use from April next year.

I have been ‘assigned/agreed to use’ FreeAgent, one of the bigger suppliers of software for cloud accounting.  Last week, I set up my account, but now, with the month-end approaching, I have had to start to set up client details.  This was easy enough, albeit in the free trial you are told you are only able to add two people as contacts at each client and there is no obvious place to do this (I still haven’t worked it out).  However, one thing that FreeAgent does have is an online chat help service.  Unfortunately, the lady who responded to my question didn’t read properly what I’d typed, which caused a slight misunderstanding, but that wasn’t a huge problem and it was soon rectified.

Another thing that you’ll find if you use FreeAgent is that they are very good at self-promotion (much better than XERO).  The default message on your invoice emails includes a line telling the recipient that the supplier is using FreeAgent.  There are also lots of reminders to recommend friends to use their service, with broad hints as to the financial benefits you’ll get as a result.  Fair enough – they are in business to make money but it’s not for me.

Moving on, one interesting thing about this pilot is that if it is successful, the established companies such as FreeAgent, XERO, Sage, etc. have a fantastic opportunity to make shedloads of money from the requirement for the self-employed to use some form of accounting software for MTD.  Call me cynical, but I don’t see the government giving my business this kind of opportunity by changing the law in such a way that a huge section of businesses have to use services like the one I provide – but anyone who knows anything about the machinations of government knows that they do not work in any kind of fair or reasonable way (see Private Eye every fortnight for regular confirmation of this fact).

I know that FreeAgent, and I presume its competitors, are investing heavily with a view to making MTD a very profitable business line.  However, the government/HMRC have apparently promised (and the nice chap at HMRC with whom I’m dealing confirmed this) that there would be some free to use software that would negate the need to use one of the paid-for solutions like FreeAgent, XERO, etc.  As I said to the gentleman at HMRC, in that case, and always assuming that the free software does all one needs it to, why would anyone pay for the more expensive cloud accounting packages?

In my last blog I told you that I’d emailed FreeAgent to ask whether the free trial I was on gives me access to their full service or whether it’s a test version of some ‘forever free’ software.  The nice lady from FreeAgent replied to say they are still deciding what is the best course of action on this, and if they do go ahead then what kind of features a free version of FreeAgent might include.  She also confirmed this is still under debate and is the reason for their conducting the research.  Finally, she also confirmed that the version of FreeAgent used for the pilot “is our full feature paid version.”

While the geeks at FreeAgent and elsewhere will be poring over the (incredibly valuable) data they get from the free trial, if the users are not given a chance to evaluate a free software option then what is the point of the HMRC trial in the first place?  You don’t have to be a genius to work out that any commercial company like FreeAgent is not going to come up with something that does more than the bare minimum required by HMRC for a ‘forever free’ option, and there will be considerable pressure (all those reminders I mentioned above) for users to switch to the paid-for software.

Alastair Blair, thePotentMix