The UK government has announced plans to make tax digital for businesses and it’s important that you understand what this means for your business, but do not worry, the team GW Accountants are here to help.
The government is keen to make the UK tax system more efficient and effective, and this means moving away from the traditional paper-based system. Instead, all businesses will be required to maintain their records digitally and submit their tax returns online.
The good news is that there’s plenty of time to prepare for this change. The government website states that “self-employed businesses and landlords with annual business or property income above £10,000 will need to follow the rules for Making Tax Digital for Income Tax from 6 April 2024.”
However, even if your business isn’t affected yet, it’s a good idea to start getting prepared for the change. Here are some tips on how to make tax digital for your business:
1. Use software to maintain your records
One of the key requirements of the new system is that businesses maintain their records digitally. This means using software to track your income and expenditure. There are a number of different software packages available, so it’s worth doing some research to find one that suits your business.
2. Keep track of your invoices
You need to submit your invoices to HMRC under the new system, so it’s important to keep track of them. Make sure you have a system in place to track when invoices are sent and received and keep digital copies of all your invoices. We can help you get set up on a cloud based software which will enable you to snap a picture of your invoice and it will appear in your software. This way you don’t have to worry about losing invoices.
3. Submit your tax return online
Once you’ve completed your tax return, you’ll need to submit it online. This can be done through the HMRC website. You’ll need to create an account and register for the service, if you haven’t already. We submit all of our clients tax returns digitally through our agents HMRC portal, so no need to worry about this if you don’t know what to do.
4. Get help from an accountant
For business owners and self-employed individuals this is probably the most important piece of advice you could get when it comes to your business finances. To avoid common pitfalls, penalties, and mistakes one can make with tax, it is worth to get the advice of an accountant. They’ll be able to help you with the transition to the new system and ensure you’re complying with the requirements.
Making tax digital can be daunting for businesses but do not worry, the team at GW Accountants are here to help. We are an expert team of accountants who work with your business to ensure your business finances run smoothly. We explain everything in plain English and remove the daily frustration of dealing with business finances, so you are free to concentrate on working towards your business goals. We can ensure a smooth, worry-free transition to digital taxes. If you have any questions at all or would like to know more about making tax digital, please do not hesitate to contact us.
