Online Bookkeeping
Kashflow
www.kashflow.com
Quickbooks
www.quickbooks.intuit.com/uk
Freshbooks
www.freshbooks.com Clear Books
www.clearbooks.co.uk
Xero
www.xero.com Freeagent
www.freeagent.com
initial difference was that the system
picked me up if I put contradictory figures
in the boxes.
The really big change came in 2013
when I started using online software for
my bookkeeping. I chose FreeAgent, which
has a user-friendly, visually attractive
interface and excellent support both
online and by phone directly to real,
knowledgeable people. Another appeal is
that they are UK (Edinburgh) based. Other
choices available include QuickBooks,
FreshBooks and Xero. Any of these services
have a cost (from about £12 a month,
although discounts are available), but
I reckon the fee is worth it to save the
time and hassle of maintaining a manual
system.
One great joy of going digital with my
bookkeeping is that – after a one-time
set up of the link – I am able to file VAT
returns from FreeAgent to HMRC simply by
pressing a button. All the data is already
in the system so the figures are calculated
automatically. All I do is scan the list of
my inputs and outputs to check for any
obvious errors (such as purchases where I
haven’t recorded the VAT element).
A new development has made life even
simpler. My accountant has encouraged
me to start using ReceiptBank, which can
be linked to bookkeeping software. Now
when I make a purchase I photograph
the receipt with my phone using the
ReceiptBank app, which then extracts the
data for me, such as name of supplier,
invoice amount and VAT charged. It
guesses the expense code and it’s a
quick job to correct this if need be as I go
through the list and click publish to send
the details to FreeAgent. It can also handle
non paper invoices and receipts – I simply
email them to my ReceiptBank account.
Registration
for VAT is an
individual
decision – you
need to weigh
up potential
gains (or losses)
and balance
them against
the effort
involved
The future
T
he new kid on the block is Making
Tax Digital (MTD), which is “a key
part of the government’s plans
to make it easier for individuals and
businesses to get their tax right and keep
on top of their affairs”. Of course, it also
speeds up the collection of tax, enabling
the government to receive their money
earlier than previously.
12
16 Outdoor focus | spring 2020
www.felicitymartin.co.uk
From April 2020, all VAT-registered
businesses and organisations with a
turnover of more than £85,000 were
required to keep records digitally and use
HMRC-compliant software to submit their
VAT Returns. In due course this will apply
to all VAT registered businesses.
The next step with MTD will be
to require digital returns for Income
Tax. Originally, this was going to be
compulsory for all businesses from April
2020, but it has been put back to an
unspecified date because the first pilot of
the system has not gone smoothly.
The government’s eventual aim is
that everyone trading as a business will
make digital Income Tax returns quarterly
(regardless of VAT status). HMRC’s view
of what’s in it for businesses is, “You can
view an estimate of the tax you might owe
at the end of your accounting year, based
on the information you have provided
so far in your business tax account.”
However, my guess is that eventually
Income Tax may – like VAT – become
payable quarterly.
Conclusion
I
n writing this I found I was unable to
cover only VAT, because it is bound up
with bookkeeping and tax in general.
Personally, I am glad that the road I
have gone down with VAT registration
has taken me to a point where I have
little more to do to comply with MTD
developments. Another VAT registered
member commented, “We also use an
accountant and that’s more than paid
for by the VAT reclaimed on cameras,
software, travel/airfares/fuel/campsites,
and so on.”
Registration for VAT is an individual
decision – you need to weigh up potential
gains (or losses) and balance them against
the effort involved. It takes some time to
get your head around how it works and
the rules in some areas (particularly if you
buy or sell abroad) can be complex. Thus,
like many, you may decide not to bother
with it. However, it seems that everyone
will need to make their bookkeeping
digital sooner or later. If you’re still using
spreadsheets, you might like to look at
other options before change is forced on
you by HMRC.