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Posts in Cloud accounting

Changes to reporting income for SMEs and Individuals

July 7th, 2017 Posted by Accounts software, Business, Cloud accounting, MTD, Tax 0 thoughts on “Changes to reporting income for SMEs and Individuals”

I would urge you to spend just a few minutes reading this … I’ll do my best to keep this as short as possible, sticking to the key points …

Making Tax Digital (MTD) is a HMRC initiative which is due to come into effect from April 2018.  Essentially, all businesses (sole traders; partnerships; limited companies) and individuals who are required to submit Self Assessment Tax Returns with income over £10,000 per annum, will be required to submit details of their income and expenditure to HMRC on a quarterly basis, digitally, in a pre-prescribed format.

Businesses and individuals will inform HMRC of their income and expenditure for a three month period, and HMRC will calculate the tax payable.  This calculation will not take account of accounting and tax adjustments, this will be just a simple calculation of income less expenditure, which will need to be submitted within 30 days of each quarter.   Larger businesses and those who are VAT registered should not find this too onerous task, as these businesses will already be in the habit of collating information for tight deadlines.  However, smaller businesses and those who are, shall we say, a little less organised, need to get organised for Making Tax Digital coming into force.

I have heard some businesses saying “Oh, it doesn’t matter my accountant will take care of it” …. Yes, we shall where clients want us to deal with the additional filing, however …. or maybe “but” would be a more appropriate word, there are a couple of issues:

Firstly, as springs to most smaller business owner’s minds, what will the costs be for this extra work carried out by my accountant?   There will be additional fees where we are instructed to deal with the additional quarterly filing.  However, at the moment until we can see exactly what the requirements will be we are unable to confirm costs.  We generally anticipate though that the smaller the business, the lower the fees.

Secondly, and this is probably the factor of more concern, is the impact on cashflow once quarterly tax payments come into effect.   At some point, a date yet to be confirmed, tax payers will be expected to pay the tax payable each quarter (in real time).  Clearly, spreading the payment of tax throughout the year is a great idea – not having a large tax bill nine/ten months after a year end is a far improved process.    However, the information which will be submitted to HMRC will not take account of tax adjustments and therefore it is far more likely that tax will be overpaid throughout the year, and then refunded once the final year end accounts and tax returns are submitted.

There is also the effect on cashflow on the transitional year where we move from paying tax once or twice a year (depending on the business structure) to paying on a quarterly basis.  There will be a year where many are paying tax for the previous year (as we do currently) and also need to pay any tax due every three months, with that same year.

Quarterly reporting is due to take effect from April 2018 for businesses (sole traders and partnerships) and individuals who have income over the VAT threshold (£85,000).  Limited companies and those that are VAT registered will move over later.  Those with a turnover under £10,000 are exempt.  It may well be that in light of Brexit and other challenges that the Government has, that MTD going live is pushed back until 2019.   However, it has been made clear that this will go ahead at some stage.  The UK are basing their model on that of Sweden, which went live four years.  Much of Europe and the US already file quarterly tax returns.  The dates are yet to be confirmed as to when quarterly payments will take effect.

I hope that I don’t sound too negative about these changes … I am all for it … At Clarand we work digitally with our clients and we anticipate the transition should be smooth, however there will be some challenges ahead for some businesses and individuals in the transitional years.  I think the saying goes …. “By failing to prepare … you are preparing to fail”.  Clarand Accountants have already held a seminar about MTD for their clients, and will be holding more later in the year.

Claire

Online Accounts Software (Cloud accounting)

March 20th, 2015 Posted by Accountancy, Accounts software, Business, Cloud accounting, Digital 0 thoughts on “Online Accounts Software (Cloud accounting)”

With more and more of our clients turning to using online accounts software to help support them with their day to day finances, we thought we’d share some of the benefits that our clients have reaped from going digital …..

  • Real-time accounting
  • Easy access by their accountant throughout the year
  • Access whilst on the go
  • Saving time
  • Reducing costs
  • Helping with forecasting/planning
  • Going paper-free
  • No year-end surprises
  • Monthly fees; no upgrade costs and no contracts
  • Secure and no backups

There is now a vast choice of user-friendly online accounts packages for all size of venture and business and there are just  a few detailed below, including Exact Online; Xero; Quickbooks Online; Freeagent; Clearbooks; and SageOne.

 

                  Exact Online

 

Many features being …..

  • Live bank feeds (no need to input statements manually)
  • Easy to use
  • Smart phone and tablet apps
  • Document management/storage
  • Take photographs of receipts/documents
  • “Bolt on” packages and apps with additional functionality ie Receipt Bank; Shopify
  • Integration with HMRC (ie easy filing of VAT returns)
  • Client relation management system
  • Monthly fees; no upgrade costs and no contracts
  • Secure and no backups

Most have free trials/demos so take a look and see what’s out there and how it could work for you.  Any queries please contact us as we can help you ….

Cloud accounting – how can it benefit you?

November 27th, 2013 Posted by Cloud accounting 0 thoughts on “Cloud accounting – how can it benefit you?”

Cloud accounting is where the world of business is moving.   Most businesses already deal with the cloud, and accountants are getting there too.

“The Cloud” means that everyone will be working virtually and for many businesses, location is gong to become less and less important.  The same goes for accountants, no longer will your accountant need to be based in the same town as you, with Skype, Google +, etc and cloud accounting packages, everything can be done in real time and when its convenient to you, whilst still retaining the personality.  Therefore your choice of accountant can be driven by what is important to you – personality, experience, value added services and cost.

Fed up of sending backups and huge excel files for the year end to your accountant?  Fed up of then receiving a long list of year end journals for you to update your accounting software?  None of this need be the case with using a cloud hosted accounts package.   Both yourself and your accountant can access the package in real time, with your accountant being able to extract the information they need.

Same goes for any problems you come across during the year.   Your bookkeeper has a problem that needs resolving asap, they can call up their accountant, both look at the online data in real time and discuss the issue.   No need for the business owner to take a back up and send it to the accountant, for the accountant to then spend time restoring it and the time that is taken to deal with this.

Not working on the most up to date version?  Cloud accounting packages are updated via downloads – again everything is done virtually.

You can upload bank statements directly to many of the packages, reconcile easily, run bespoke reports, scan in receipts and know how the numbers of your business anytime and anywhere.

What about the costs?  Cutting edge, easy to use, low risk – sounds expensive?  Not at all – compared to traditional accounts packages the cost of many of the packages on the market is substantially lower.  In many cases they also include upgrades (which just need downloading) and they are backed up by the host provider.  Often the cloud packages are at the cutting edge of what is available on the market as they tend to move faster than traditional packages.

Speak to us about cloud accounting and the choices out there.  It makes sense – it saves time, deal with your accountants in real time, not just at the year end, bespoke reports, user friendly, download updates, secure and safe data. 

Check out our latest video sharing our views on cloud accounting with AccountingWeb:

 http://www.accountingweb.co.uk/21st-century-accountant-practitioner-edition-part-1

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