Richard Stonier, partner at online accountancy software firm Tally Accounts, explains how bakery owners can be proactive and prepared for the transition to tax digitalisation
In 2015, the government announced that, by 2020, most businesses, self-employed people and landlords will be required to keep track of and update HM Revenue and Customs (HMRC) of their tax affairs digitally.
While some bakery owners may rejoice at the news, after being overloaded with paperwork and often frustrating communications with HMRC over the years, for others the transition may not be so effortless.
According to research, two-thirds of small businesses don’t use accountancy software, and 16% don’t use any sort of financial record-keeping at all, let alone a digital one.
Keeping useful and usable financial records when starting from scratch can be easy – just keep it simple. Find a system that works for you, and stick to it, and if you can make these records digital, even better. Monitoring income and outgoings using a simple spreadsheet or easy-to-use software, will make transitioning to the new HMRC systems much easier in the long run.
Speaking to an expert accountant will help eliminate headaches further down the digital line, as they will be able to give the best advice for future-proofing your business accounts.
Using accountancy software that is prepared for the switch will likely mean a smoother conversion when the deadline rolls around. For owners who don’t feel comfortable using computerised software yet, working with experts who already use the right software and are prepared for the shift, will also ease troubles.
Many accountancy experts are already working on improvements to their software to make the transition to digital tracking and tax submission easier for business owners long before the transition deadline.
Don’t bury your head in the sand and hope the digitalisation of tax will go away. Regardless of whether business experts are in favour of the transition, or not, the change is going to happen, and fast.
Be prepared. Do your own research and get to know the new system now. Then, when the system comes in and is a requirement, rather than the optional practice it currently is, you will be comfortable, confident and capable.
Ultimately, the successful tracking and processing of your business accounts is for your benefit. Properly administered accounts mean less time sifting through month-old receipts and more time generating new business and making sales.