This time next year
It’s lunch time and as I sit here with my Cup-a-Soup wishing I had gone for a walk in the park I’m planning what we need to do for the new tax year. There’s the increases to Minimum wage, increases to Auto Enrolment Pension contributions, increases to personal allowances, a reduction to the 0% tax band on dividends, further restrictions on interest on loans for buy to let properties and the not too distant prospect of Making Tax Digital for VAT just for starters. It all needs planning. But do you know how these changes will affect your business?
This time next year Rodney
We all know the phrase ‘this time next year, Rodney, we’ll be millionaires’ and eventually it came true, more by good luck than by good management. But can you afford to run your business hoping that something valuable will appear and change your fortunes. Small business owners have enough to do just running the business, I’m sure most of you didn’t set up your business for the fun of doing the paperwork! But the paperwork can give you some valuable insights.
Making Tax Digital
Making Tax Digital for VAT becomes mandatory for VAT registered businesses trading above the VAT registration limit with effect from 1 April 2019. VAT returns will need to be filed using digital software and using that software gives businesses a huge opportunity to look at their business in more detail without spending too much time trawling through paperwork.
Most accounting software will process transactions from a photograph on your phone, either directly or through an app, which will save time on laboriously entering details. Bank feeds give you a direct download from your bank account and transactions only need to be allocated. It’s that ‘allocation’ that makes the difference. If your software is correctly set up you can get the information you need at the press of a button or two. Sales don’t have to be just sales, they can be by product, by area, by sales rep, you set the demographic and the software does the rest. What better way to work out what is going to make you a millionaire. So when there are changes that’s the information that will help with all of this planning.
HMRC have also announced the start of a pilot scheme for Making Tax Digital for Business – the famous ‘end of the tax return’ to be replaced by quarterly digital reporting. It will not become mandatory until at least 2020 but there’s no reason not to plan ahead and use the digital technology to help your business now.
Well, that’s the planning done, now have I got time to nip out and feed the ducks….
