I think we can all agree that we are currently going through a significant period of change in the world. In no particular order, we have inflation at a zillion per cent, interest rates to match, a new prime minister, and I feel like I’m subsidising a nuclear power station each month when the direct debit goes out to pay my energy bills. There’s a big change in Europe following Russia’s invasion of Ukraine. We are changing from petrol/diesel cars to electric cars, the climate is changing before our very eyes but we seem incapable to believe it and we can’t go on holiday without having to queue for hours at an airport. (Is it just me or can’t certain people multiply the number of passengers by the number of planes to see how many people they will have to deal with!) Oh, and everyone’s on strike apart from me!
To top it all, our friends at HM Revenue & Customs are pushing ahead with introducing Making Tax Digital. If you are a landlord or a sole trader then this will affect you and you need to be aware of what it means to you. This is a generational change in the way you declare your earnings or rental income to HMRC. You will have to submit quarterly returns, invariably using the software. So, no more excel, paper records or back-of-envelope calculations to see how much tax you have to pay. But, this is a good thing, isn’t it? OK, so the reporting may be onerous and we still don’t have all the details of how it’s going to work, but for once you will have an up-to-date picture of your business as you will be using one of the cloud accounting packages out there such as QuickBooks, Xero or Sage. You will be able to keep an eye out on the amount of tax you will need to save for as you’ll have all the information readily available, and it can all be operated from your phone.
If you haven’t already done so, this really is the time to move to the cloud for your accounting software. The packages are cheap and relatively easy to use and after a small amount of training, you will reap the benefits.
So embrace this change, don’t avoid it.
We can help as we have been using the software for years and can best advise you on the most suitable one for your business. If you need any help with this, please get in touch. We offer a free initial discussion to all new clients.
Article by Steven Glicher