With the government’s Making Tax Digital plans back on the table, HMRC might be surprised to find out that almost a quarter of small business owners and sole trades manage their finances entirely on paper.
This is according to a new poll by Simply Business, where 24 per cent of those surveyed said they don’t even use a spreadsheet for the monetary parts of their business.
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Less than a third of business owners use specialised accounting software
Even though there are a number of free and subscription-based accounting programs for small businesses out there, less than a third of respondents said they used specialised software.
But that doesn’t mean UK small businesses are completely against technology. Nearly half said they manage their finances using a spreadsheet, such as Microsoft Excel or Google Sheets.
Should small businesses manage their finances digitally?
At the moment, it’s entirely up to business owners to decide how they manage their finances - so long as they register for Self Assessment and remember to file and pay their tax return each year.
However, though it was put on hold for a while, the government’s Making Tax Digital scheme was brought back in the Queen’s Speech last week.
This means that, starting in 2018 and by the end of 2021, all small businesses will be required to keep digital records. Accounting software will have to be able to link to HMRC for the submission of quarterly tax returns.
You can find out more about what Making Tax Digital will mean for you, or check out the best accounting software for small businesses.
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