Government plans to make all businesses file digital tax returns could run into trouble after research found that two-thirds of small businesses don’t use accounting software – and a further 27% use basic computer programmes only, for book-keeping.
The finding follows a study carried out by the UK200Group, a membership association of around 150,000 independent accountants and lawyers.
The evidence suggests that many small and medium size enterprises are unprepared for the new rules which say that all businesses must file their digital tax returns every three months from April 2018 or face a fine.
However, the transition need be neither traumatic nor expensive for companies who choose to take steps now to embrace some form of digital accounting. The biggest change will be for those firms who have never embraced even the most basic programmes such as spreadsheets – firms handing their annual accounts to their accountant in a shoe box are advised to take advice now.
At In Cloud Solutions we encourage companies of all sizes to embrace digital software which can be bought on a subscription model and can run all aspects of a business – not just financials – we recommend Business ByDesign from SAP.
Richard McNeilly, chair of the UK200Group digitalisation taskforce and managing partner at accountancy firm Dains, says;
‘Making Tax Digital represents the single most significant change to the UK’s system of taxation in recent times, and many of our smaller business clients are simply not ready for it.’