Time is fast running out for UK businesses

- Thursday, February 02, 2017

 TaxtDon’t you just love the UK Government? UK businesses are just getting over the huge cost and upheaval from the Automatic Enrolment regime and now we have another one to deal with. You’ll love this.They call it ‘Making Tax Digital’.

Of course we don’t yet know exactly how it works, because as you know, the Government does have a habit of changing its mind (just look at the introduction of Automatic Enrolment). Anyway, here is the essence of what they are saying:

  • Although there may be a few limited exemptions, businesses must use digital tools (such as Xero for their accounting system),
  • Businesses will send summary data to HM Revenue & Customs about their business each quarter (and this is why they will need to go digital),
  • HM Revenue & Customs has confirmed they will not be providing their own bookkeeping/accounting software. This means you will have to sort out your own cloud accounting solution, and
  • It is planned to start in April 2018, which isn’t far away!

That’s a very quick overview. If you want more detail HM Revenue & Customs has published its consultation document. You can read about it here on the Governments website (although it doesn’t make very exciting reading!).

So what does this mean for you?

Very simply it means you will probably need to move your financial accounting system onto a cloud accounting system, such as Xero.

If you’re not sure what a cloud accounting system is think of it as the difference between traditional banking and online banking.

When online banking first came in there was resistance and worry over security. Now most people use online banking. It makes our lives easier. We can transfer money far quicker than writing out cheques and posting them. We can check our bank balance whenever we need to. We can move money between accounts instantly.

A cloud accounting system has many advantages over more traditional accounting systems (manual books and records, spreadsheets and desktop systems such as Sage Line 50).

Find out about the benefits of cloud accounting

Our firm specializes in cloud accounting systems and are Xero Gold Partners.

We are running a Free Xero workshop on 16th February 2017 from 4-5 pm so sign up here to secure a place
if you want to know more about cloud accounting software. These workshops will be run monthly and are open to both clients and others.

 

If you can't make it get in touch to set up a meeting