As the world is becoming increasingly digital in all aspects of modern life, the taxman isn’t getting left behind. In fact, HMRC plans to make the UK “one of the most digitally advanced tax administrations in the world” – but is your business ready for the change?
The Making Tax Digital initiative will bring fundamental changes to the tax system. This means VAT-registered businesses with a taxable turnover below £85,000 will be required to follow certain rules for their first return starting on or after April 2022. This means businesses will need to start using digital accounting software this coming April (2021).
HMRC will expect every business to have some sort of cloud accounting software,That’s going to be the next push from HMRC. So this is a reason why I’m trying to get my clients on board with plenty of time to spare.
Benefitting more than just the taxman
Whether you’re happy with the upcoming changes or not, there is little that businesses can do but comply with the new rules. However, Jason believes there are plenty of positives to digitising your books, especially for blue-collar businesses.
“In the construction industry, people want to turn up to the job, do the job and get paid at the end of the week,” says Jason. “They don’t want to think about their accounts. They go from one job to the next, and it’s easy to miss invoices and lose receipts.”
“With the right software, even keeping track of receipts, which isn’t always easy when you’re on and off job sites, is as simple as taking a photo on your phone.”
The extra mile
Computers, apps and digital technology aren’t everyone’s forte, which is why Jason aims to simplify the process as much as possible for his clients, whilst offering guidance along the way.
“I’ve introduced many of my clients to simple accounting software that practically anyone can use,” says Jason. “Just something basic that’s available as a smartphone app. So when it comes to logging receipts, for example, my clients can take a photo, upload it to the cloud so that I can log it on my end. Basically, once my clients have taken the photo, they don’t have to worry about it again.”