With the new Making Tax Digital legislation coming into force in the next couple of years, making sure your bookkeeping is in good order is going to be essential in helping you and your business prepare for the changes.
We know a lot of our clients are worried about the changes that are going to come with the new regulations, but we are here to reassure you that if you start making small changes now, you will be well prepared for April 2023.
The new version of a tax return that Making Tax Digital involves, means you will have to submit returns every quarter, instead of annually. Getting into good bookkeeping habits now will really help with the transition.
What is bookkeeping?
The term bookkeeping refers to recording financial transactions and activities on a regular basis. It involves regularly carrying out the following tasks:
- Producing invoices
- Recording purchase and other financial transaction
- Maintaining and balancing current accounts, historical accounts and general ledgers.
- Reconciling bank accounts
Why is good bookkeeping so important for your business?
Bookkeeping is something that shouldn’t be avoided and should be carried out on a weekly, if not daily basis. It is a major part of running a business and needs to be done carefully and thoroughly to ensure your finances are all in check and compliant with HMRC regulations.
Here are some advantages of good bookkeeping:
- Helps you to budget for your business more accurately.
- Keeps you prepared for tax returns – you can put money aside throughout the year to save up for the tax bill.
- Maintains well-organised records – this should be a top priority for every business!
- Meets government regulations and conforms to new HMRC guidelines, including Making Tax Digital.
- Gives you a better overview of your business – you are able to keep on track of your income, outgoings and any other financial goals you have for the year ahead.
Make bookkeeping easy with our new app
We understand that bookkeeping can be time consuming for business owners, so we have launched a new app to help you get organised and prepared for Making Tax Digital. Our app includes a range of useful tools including:
- GPS Mileage Tracker
- Receipt Manager
- Document Scanner
- Tax Calculator
- Personal Reminders
- Income Manager
- Direct links to the HMRC website
If you would like some help or advice on getting your bookkeeping up to a high standard, or for any more information about Making Tax Digital, please email us and we can help you through the process.