April brings the start of a new tax year and whether you currently use spreadsheets, a desktop/online accounting system or dare I say still using a pencil and paper, if you have been thinking about switching to a better system now is the perfect time!
With HMRC looking to widen the scope of MTD in April 2020, here’s why the first week of April is the best time to move:
A new accounting year
This is the point of 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 and 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, summary data will need to be sent to HMRC on a quarterly basis 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 contact us at firstname.lastname@example.org