Keeping Digital Records of Your Bookkeeping will be Compulsory

The government is on its way enforcing all businesses whether large or small to maintain their bookkeeping records electronically.

Eventhough you can get a good idea of the government’s intentions by reading the article “Making Tax Digital” it doesn’t give any concrete information to say how businesses should plan for this. While it’s just an outline it spells out changes that will have serious consequences for many businesses.

Unincorporated businesses with income of £10,000 per year or more, which don’t currently use software to keep financial records, will be required to do so. It seems that companies will have to use digital record keeping no matter what the level of their income. The new system will also include landlords who receive rental income more than £10,000 per year.

The government will provide free apps to help businesses. However, it is fair to assume that they won’t be sufficiently comprehensive for some businesses and so they may have to purchase commercial software. This can be relatively cheap, less than £100 per year for a small business, but using software isn’t as simple as keeping manual records. Most require a working knowledge of double-entry accounting, which may mean having to pay a bookkeeper instead of the business owner doing it by himself/herself.

Although the deadline given is “by 2020” the document also says that some businesses will need to comply with digital record keeping by April 2018.

 

 

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