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For Valentine’s Day, my wife gave me an iPhone. The first thing I did (after thanking her, of course) was to copy over my music. The second was to look at the app store to see what I could download.
January was a recent memory; the overwhelming feature of that month for me and many others is tax returns. I don’t know about other readers, but I find preparing the return isn’t the problem; it’s getting the information from the clients that can be hit and miss. Some also underestimate the tax they owe, which can lead to other problems.
I can’t be the only one to have received a new smart phone or tablet recently. Mine got me thinking about their wider applications (pardon the pun) for business.
One thing led to another, and here we are with a review of some of my favourite tax apps. They might be of use for professional advisers, but primarily I’ve looked with a view to which ones advisers might want to recommend to clients to enable them to keep up to date with their taxes.
The apps won’t ever be a replacement for professional advice but, used properly, they may help clients become more efficient, and advisers will be able to reap the rewards next January.
Please note that there are lots of apps on the market, and I’ve looked at only a few. Also, I’m an accountant not a software engineer, so I can’t advise on the technical aspects. These reviews are likely to be most useful for those who advise smaller businesses or sole traders, and they are my personal thoughts on and impressions.
HMRC Tax
- What it is: a tax calculator that shows the income tax and National Insurance contributions they pay on their earnings based on annual, monthly and weekly income. The app also calculates and explains how the government spends the tax the user pays.
- What it costs: nothing.
- Notes: this is a simple income tax and NICs calculator for employees and for those self-employed clients who work on a simple cash-in-hand basis or for whom more complex questions could be off-putting. I suppose that it might be interesting to know how the government spends our money, but that’s not a practical benefit. The downside to simplicity is it won't provide an accurate picture for anyone with a more complicated position (with student loans or pensions, for example).
- Available: iTunes and Android market.
VAT Toolbox
- What it is: VAT and sales tax app that shows different rates and calculates the VAT inclusive and exclusive amounts.
- What it costs: nothing.
- Notes: this app provides VAT rates for different EU jurisdictions, and calculates VAT inclusive and exclusive amounts. It app includes an EU VAT number validator to help check numbers, although this requires connection to the internet (presumably it links to the EU VAT verification system – VIES). It also provides sales tax information for different US states. Other than the VIES link, with a 20% VAT rate in the UK it is hard to see the benefit of this app for most businesses compared to, say, a calculator. It might, however, be useful for those shopping in the US.
- Available: iTunes.
Tax saver UK
- What it is: an app designed to help small businesses save money.
- What it costs: nothing.
- Notes: this app compares the tax effect of earning an amount either as a sole trader or through a limited company. Because the app does not consider how the profits could be extracted from the company it distorts the position and, in truth, seems to be designed to encourage incorporation. Unsurprisingly, there is a link to a company formations website. Not so helpful as an app, but a good example of how to market services through apps.
- Available: iTunes and Android market.
Tax tool 2013
- What it: income tax, NIC and VAT calculator with reasonable flexibility.
- What it costs: 69p
- Notes: this app’s primary function seems to be a tax and NIC salary calculator for a given tax year. There is also a VAT calculator. A nice touch is the option to perform reverse calculations to calculate the salary a user needs to meet their desired take home pay. There are options to add additional data to the salary calculator such as pension payments, bonuses and student loans. The app does offer a handy breakdown of UK tax rates, allowances and more. Of the personal tax calculators, this is probably my favourite. My main complaint is that the interface seems to have been designed for a phone and not scaled up for a tablet.
- Available: iTunes.
iPAYE
- What it is: PAYE and NICs calculator for businesses, which could be used for either employers or employees.
- What it costs: 69p
- Notes: This is by far the most detailed of all the applications I’ve tried. It seems to be of most use to employers seeking to keep track of PAYE and NICs for one or more employees. It has a lot more functionality than I would have expected to see in an app for this price – it even allows payslips to be printed out. The app allows calculations to be saved for multiple employees for several years and also includes a PIN code system for added protection.
- Available: iTunes.
Applied Apps
Aside from a vague feeling that I have caught up with the rest of society, there are several things I take from this review:
- Advisers know their clients best. Some will benefit from having one of these apps either to keep records (I’ve not reviewed the Sage Record Keeper app, but it seems useful) or to set aside the right amount of tax. For others, they will be a distraction.
- Not all apps are equal: of those tested, iPAYE is probably the best for a small business with employees. The HMRC app is most suitable for a self-employed person who is paid in cash. Tax Tool 2013 is somewhere in between.
- We need to consider as a profession the applications of apps as a marketing tool and a way to win client loyalty. M-commerce is clearly a growth area and apps may be a way to reach new markets.
James Odds is a partner in the wealth management team at Matthew Arnold & Baldwin LLP. He can be contacted by email
