Business for Beginners
KashFlow commissioned a study among sole traders and owners of businesses with less than ten employees, to get a better understanding of the pressures they feel when it comes to things like balancing their books, managing cashflow and doing their annual tax return.
These can have serious consequences for micro businesses, a sentiment echoed by Roy Maugham, Tax Partner at UHY Hacker Young who recently said: “There is increasing pressure on small and mid-sized businesses to spend their time and money on systems to ensure that tax affairs are accurate and up to date. Without adequate care, small businesses are at risk of being pulled up over minor mistakes or small disparities, which could incur disproportionately heavy fines and penalties.”
If you’re like me the worst part of running your own business is accounts and tax. They are a necessary burden, which could become much worse as MTD (Making Tax Digital) comes into force next year.
There are of course many advantages none more so than having the ability to see how well – or not – your business is doing. I think the government has backed off being able to pay the tax you owe on the fly, by calculating what you owe at any one time. But making the best use of MTD will mean being a little more sophisticated with your accounting systems.
The government says that even using a spreadsheet will the OK, but really to ensure your business fully complies with the accounts and tax regulations, some form of accounting systems will be needed.
My accountant for instance is also a small business, so they are waiting to see which system their accountants suggest they use, and by extension, which accounting system I should move to. A bit of a chicken or egg situation, but at least this advice should be based on a detailed examination of that MTD means on a practical level.
And practicality is really what this is all about. None of use in the micro business community want more complexity – especially when it comes to tax and accounting. I am at the moment in the process of assessing – at least as far as this is possible – how all the small business accounting systems stack up when MTD is considered.
Currently there is a lack of detailed information about MTD will be implemented and how the leading accounting services such as Sage and Kashflow will interface with the new online tax accounts we will all be getting from HMRC.
The Micro Business Handbook collection of eBook Apps I am writing at the moment will include what I call ‘Mini Guides’ These are eBook Apps but they focus tightly on a single subject. I intend to write a Mini Guide on my assessment of MTD and the online accounting services that will be lobbying for your subscription money as MTD approached.
If you have any first-hand experiences of these accounting systems and MTD you think the rest of the business community would benefit from hearing about, use the contact page on this site to get in touch.