The recent announcement from HM Revenue and Customs (HMRC), that tax is going digital, is an important one for both businesses and individuals. The implications could be far-reaching, particularly for your business. This announcement provides a good opportunity to assess your systems and processes, not only to ensure you meet your new obligations but to ensure you are taking full advantage of the digital applications available.
The target date for the majority of changes to be in place is 2020, with various features being added along the way. HMRC plans to pull together nearly 600 software applications which will allow you to a) keep track of your tax affairs digitally and b) update HMRC regularly via your online account. You will eventually be able to pay your tax online throughout the year, spreading your liability, rather than paying it in one lump sum. This will only be possible if your business records are linked to HMRC, so it will be necessary to use an application to help with the digitisation of your accounts.
There are a variety of systems already on the market and we recommend giving yourself time to make an informed decision. By starting now, and getting ahead of the Government deadlines, you will have the freedom to choose applications that best suit your business needs.
Lovewell Blake is a gold partner of Xero, a cloud-based tool that helps with all aspects of bookkeeping. To find out more about Xero, or other tools available, to help you embrace the digitisation of accounting please contact Shaun Mary.