What is making tax digital?
You probably have seen, heard, or read about making tax digital. Xero are currently running a social media campaign urging people to go digital with their tax.
But what is it?
Making tax digital is a key part of making tax easier for individuals and businesses to get their tax right and keep on top of their affairs making it more effective, more efficient and much easier. HMRC wants to become one of the most digitally advanced tax administrations in the world!
As the rollout of Making Tax Digital continues, here’s what you can expect to happen next;
VAT- VAT registered businesses with a taxable turnover below £85,000 will need to the new making tax digital rules.
Self assessment – Making tax digital for income tax will be introduced by 2024, this will require self-employed businesses and landlords with an income above £10,000 will have to follow the MTD rules.
Corporation tax- MTD for corporation tax is expected to be the next phase but wont come into effect until at least 2026.
All this means you will need to use HMRC-recognised make tax digital software to keep full digital records and file VAT returns. VAT registered businesses will be required by law to maintain their digital records.
What's the difference?
A sole trader is an individual business owner who has 100% responsibility for their company's operations, there are many misconceptions that Sole Traders have to be a single-person business however this is untrue, you can hire staff as a sole trader but only you own and control your business.
A Limited company (or Ltd) is a private company consisting of multiple owners , while Ltd's are typically owned by multiple people however this isn't a legal requirement if you wanted to become the single operator you still retain the benefits of being 'separate' from your business.
To run your business successfully you need to understand your businesses cost of sales and fixed costs, without this knowledge you CANNOT figure your profitability accurately. That’s what good bookkeeping is needed for!
Readily available cloud technology makes it even easier to outsource your bookkeeping tasks and the benefits that come with it are plentiful. More efficient, incredibly cost effective and very low risk. And gives you an incredible amount of extra time to focus on growing your business to reach your growth targets.
Let’s go through some of the benefits in more detail!
Not having anti-virus is like leaving home with your front door open, letting everyone and anyone that wants to enter.
What do viruses do exactly?
They can slow down your PC or device limiting the amount of work that you can get done in your workday. They can even cause frequent computer crashes which can cause damage to your system!
Viruses can even damage or delete the files stored on your device leaving them unable to be opened, this loss of data can be fatal to the running of your business.
Malware can also be used by hackers to use to access your files and steal all of your private data, which will leave your customers with lack of faith using you and your business in fear that their data and information that you hold isn't safe in your hands.
What does Anti-virus do for you?
Anti-virus frequently scan your computer and files to detect anything that could be a threat and works to stop and remove them before they can potentially do any harm to your computer! They also scan USB and any other removable device to stop them from spreading any virus that they may hold.
The anti-virus software not only closes the door, but locks it too!
The simple explanation is SEO stands for search engine optimisation, which is the strategy to improve your websites ranking in search engine results such as Google, this can make your website appear on the first page of google or even NUMBER ONE!
This involves researching and identifying keywords and phrases your potential customers may use when looking for products or services that you offer, optimised SEO can do the following for your business,
More people than ever before are using the internet to search for products or services because lets face it, it’s the easiest way to find what your looking for, just type a few words into google and it gives you exactly what you’re looking for (most of the time), but we also know most people don’t look through multiple pages of results on Google so if your business doesn’t appear on the first page you are missing out on potential customers.
This is where Strive Business Solutions can do all the time-consuming hard work for you, we take the time to get to know your business and research exactly what your target audience will be searching for to help drive them to your site!
We can build useful content for your website, this could be in the form of detailed descriptions, informative blogs, adding FAQ, all the information your potential customers may be looking for as well as making your site easy to use and understand, if visitors can’t find the information they are looking for this will cause them to look elsewhere, this is where many businesses lose potential customers, an overcrowded messy website will also make visitors look elsewhere.
Why is bookkeeping so important?
Bookkeeping helps a business maintain accurate financial records. Having good financial records helps the business budget for growth and lay out a financial roadmap for your company.
The HMRC require you to file a tax return every year, and good bookkeeping is the way to do this correctly and easily. Having all your expenses and income information all organised in one place on a regular basis is less time-consuming and very cost effective.
Being an organised company is beneficial for anyone who is an interested party such as potential customers, suppliers, banks and the HMRC. For example, should your business require a bank loan for a growth project, you will need to provide a lot of financial information, and having it all prepared in one place will prevent delays in your plans.
Bookkeeping also enables you to analyse your finances and perform cost saving exercises. Without proper financial records, you will not know if you are overspending. Overspending is very common in small businesses and analysing your expenditure on a regular basis can be the difference between succeeding and failing. Being able to review past and present financial information provides insight into how your business is performing.
Controlling your finances in a proper way also assists with cashflow. Paying your suppliers, and having your customers pay on time is very important for the future of your company.
Poor bookkeeping is one of the top reasons why small businesses fail.
Why should you outsource your bookkeeping?
Outsourcing your bookkeeping is very beneficial for small companies. Yes, it is extremely important, but it does not actually affect your bottom line which is essentially what every business manager should be focusing on.
The time you spend on figuring out how to keep correct records is time that should be spent on growing your business. As a manager, you need to be focussed on success and outsourcing your bookkeeping to a company, such as Strive Business Solutions, will free up time and ease the stress of finances. Hiring a professional means you also have access to our knowledge and skills which may come in handy for other projects in the future.
Hiring any new employee comes with costs, advertising, training, salary…. It all adds up. However, outsourcing means you only pay for the service they provide.
At Strive Business Solutions we tailor our bookkeeping packages to suit every business, whether you need one hour per day, or 10 hours per month, we can accommodate you.
We pride ourselves on providing excellent customer service and are always at the end of the phone or email to help you wherever we can.
Our only aim is to help our customers to succeed, and we truly believe that honesty really is the best policy.