April brings the start of a new tax year and whether you currently use spreadsheets, a desktop/online accounting system or something else, if you have been thinking about switching to a better system now is the perfect time! Here’s why the first week of April is the best time to move:
A new accounting year
The new accounting year is the point in the year when accounts from the previous year are being finalised and you’re starting afresh for the new year. For most sole traders the new accounting year starts 6th April. It is also the case that for many limited companies, 1st April is the start of their new accounting year. (If this is not the case for you, switching accounting systems can still be considered, however, it may be best to wait until your new accounting year).
Less work involved
The amount of information you need to input into a new accounting system is much less at the start of a new accounting year. This is because you can just carry over summary figures for example:
- Accounting dates and details e.g. yearend dates, VAT registration details etc.
- How much your business owned and owed at the end of the previous accounting year e.g. how much cash was in the bank, what customers owed you, what you owed to suppliers etc.
Making Tax Digital
Once Making Tax Digital comes into effect, 2018 for unincorporated business over VAT threshold, 2019 for all unincorporated businesses under VAT threshold and 2020 for incorporated businesses, summary data will need to be sent to HMRC on a quarterly business using an accounting software.
If you do not currently use an accounting software it would better to consider moving to one before the MTD introduction date rather than leaving it until the last moment.
At TI Accountancy we use a variety of online accounting software that offer different price plans depending on what you require. If you would like any further information please email me on email@example.com