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Making Tax Digital - Starts 2019...I'm ready, are you ?

Digital Accounting and Cloud Software

Posted 31/10/2016

By 2020 most businesses will be required to declare figures to HMRC online...

By 2020, most businesses, self-employed people and landlords will
be required to keep track of their tax affairs digitally and update
HMRC at least quarterly via their digital tax account. Here is the current timetable (as at May 2016):
*Those with a turnover of less than £10,000 will be exempt

A recent ICAEW survey (February 2016) said that .....

  • Just a quarter of businesses surveyed manage their accounts electronically using accounting software (25%)
  • 55% of businesses support HMRC’s stance of encouraging businesses to send in their information online
  • Only 18% think that online filing should be compulsory
These businesses will be required to use digital tools, such as software or apps, to keep records of their income and expenditure. HMRC will ensure that free basic apps and software products are available, but many businesses should choose to use commercially-available tax software packages, many cloud based. Businesses will be able to use software that compiles their tax data as part of their ordinary day-to-day activity and offering prompts for information that might otherwise be overlooked. Once the software has compiled the relevant data, businesses or more likely their agent / accountant will feed it directly into HMRC systems via their computers or smartphones. Updating HMRC directly in this way will be secure, light-touch and far less burdensome than the tax returns of today.
Essentially this will see the end of the once a year Tax Return with figures being submitted four times per year and will no doubt lead to a form of pay as you go tax system also.
Now there;s plenty that we don't know yet such as aligning the quarterly submission with VAT quarters, whether there will be a final quarter "balancing up" for extraordinary items such as Capital Allowances etc but we should all be under no illusion that this digital reporting is coming and that HMRC will make this happen somehow.
So, with this in mind, now is the time therefore to get ahead of the game and look at a suitable software package that fit's the size and needs of your business and will provide the necessary data transfer facility when it becomes your turn to join the digital reporting age. I can also take on the burden of maintaining your business records leaving you to get on with what you're good at.

If your accounting needs are straight forward then you can use free or cheaper entry level products which provide a good system for recording your business receipts and payments from your bank statements and other out of pocket expenses.

Excellent, easy to use examples of free or cheaper entry level products that will suit most businesses are:

  • Quickfile
  • If you need further functionality such as, VAT MOSS or EU VAT then you may need a more sophisticated system. Main stream options available are:
  • Kashflow
  • Xero
  • Quickbooks
  • Clear Books
  • FreeAgent
If you need any advice or assistance just get in touch.

QuickFile Cloud Accounting

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