Table of contents
Table of contents
Reporting your taxable earnings to HMRC through a tax return is a legal obligation, but using accounts or bookkeeping software is not a requirement for most people. As long as you provide HMRC with all the (accurate) information by need by the right deadlines, you can almost go about doing this as you please. Almost.
Sort of. We make a big point of saying ‘almost’ in the previous paragraph because some businesses are legally required to keep digital records and submit returns with special software. This doesn’t necessarily mean you need to use accounting software to do so.
That said, there are many reasons why we recommend using accounts software, and not just because our boss wants us to.
While using accounting software isn’t technically a legal requirement for UK businesses, the continuing rollout of Making Tax Digital (MTD) is likely to make it more of a necessity.
Making Tax Digital is a HMRC initiative designed to create a smoother, simpler tax system. The scheme is shifting how taxpayers (such as business owners) record and report financial information.
Businesses will be required to store financial data digitally, and use MTD-compliant software (like Pandle!) to share these digital records with HMRC.
Technically speaking, you can use spreadsheets to meet your record-keeping obligations, but you’ll still need separate bridging software to submit your tax return.
You’re much more likely to stay off HMRC’s radar when your accounts are well organised, up to date, and accurate. Good software will help you keep everything up to date, and will often reduce the risk of mistakes. Much better than a dreaded audit.
Most accounting software includes reporting functions and tools which make it easier to review the financial position of your business. It’s like giving your business a crystal ball, but without the risk of a rogue sunbeam burning through it and setting the curtains on fire.
Financial reports will help you spot details and identify issues before they turn into something significant. They’re also jolly handy for planning ahead, giving you a better chance of managing your cash flow.
Documenting every single cost and expense means you’re far more likely to claim allowable expenses against your tax bill. Tools which help you record every single transaction correctly, or things like receipt uploads make the job easier. It seems like a good moment to casually mention Pandle has all of these.
In today’s world of remote working and around-the-clock connectivity, cloud-based accounting means you (and anyone else you invite to the party) can access your financial information at anytime from anywhere with a good internet connection. It’s certainly cheaper than posting a shoebox stuffed with receipts to your accountant.
You’re no longer restricted to one computer near a server so you can tap into your books and accounts. You’ll also be able to do things like send invoices, track expenses and upload receipts via your smartphone on the go.
Paper records are susceptible to getting lost, misplaced, or eaten by the dog. They’ll also vanish without a trace in the unfortunate event of fire or water damage wherever they’re stored. Devices, hard drives, and USB sticks can be easily lost or stolen. We’re outrageously cheery, aren’t we?
All of these unlikely but possible scenarios put your sensitive information at risk. Cloud-based software negates these concerns by holding your details on several super secure servers in multiple locations behind highly encrypted authentication technology.
Lots of accounting software providers have cottoned on to the benefits of allowing users to pay on a monthly basis, so they can manage their cash flow. You’re also removing the need to pay for printing and data storage.
Learn more about using Pandle to make business accounting easier. Create an account today and decide what to do with all the extra time you get back.
Serial snacker, compulsive cocktail sipper, and full time wordsmith with a penchant for alliteration, all things marketing, and pineapple on pizza.
Create your account today, and decide what to do with all the extra time you get back. We hear Pilates is popular.
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