Shoe box bookkeeping gets the boot

Gasps of disbelief resounded around some of the networking meetings I have attended this past month, along with many bewildered glances around the room and plenty of shuffling in seats.

This was the reaction from many small business owners who were hearing for the first time that HMRC is expecting them all to deliver their book keeping on line, at least four times a year from April 2018.

The days of shoving receipts in a shoe box and shoddy filing systems only sorted out as tax returns’ deadline looms will soon be a thing of the past.

For most people, including the self-employed, the only information they really register during a Budget announcement is what is going to impact their pocket straightaway such as the cost of living, tax allowance thresholds and the price of a pint.

It was thanks to Norwich-based accountant, Karen Eason, who specialises in looking after the financial affairs of those striving hard to make a living from working for themselves, that the information was divulged at a number of local networking events where she was speaker.

Karen has garnered a reputation for making the financial side of business easier to understand and dispels some of the often misplaced fears that surround it.

Nonetheless, the Chancellor has fired this early warning shot at small businesses to be prepared as he ushers in the Government’s decision to make tax digital and abolish the tax return.

It will mean that by December this year, if you haven’t already, all businesses and landlords will need to sign up for a digital account with HRMC.

In order to do your books on line, you will now need to be looking at purchasing software such as Quick Books, to enable this compulsory, digitalisation conformity.

In 2015, there were a record 5.4 million private sector businesses in the UK. Over 99 per cent of them are small or medium sized (SMEs).

Their combined annual turnover was £1.8 trillion, 47 per cent of total private sector turnover in the UK, and their numbers are increasing by an annual rate of +3 per cent.

For this growing band of entrepreneurs, digitalisation is affecting every aspect of their business and while it might seem hard for some to comprehend at first, it really is a tool that in so many ways can make doing business that much simpler.

For those business owners looking to enhance their reputation, develop brand recognition and show the world what they are about then the internet provides a huge shop window.