Whether you're a sole trader, partnership, or limited company, changes are coming that will affect the way you report your taxes. Here's what you need to know:
For sole traders and partnerships
HMRC now requires all profits (or losses) to be reported to the tax year end. This means that if your year end is 31 July, the 2022 profits would be on your tax return for 5 April 2023.
Going forward, the year end of 31 July 2023 will also need to include 1 August 2023 to 31 March 2024 for the current year’s tax return. While this may inflate your profits, you may be able to deduct overlap profit from your first year of trade or from 1996 when the current self-assessment system started.
Xero is already on top of things, working to ensure the quarterly reporting requirements for Making Tax Digital (MTD) will be ready for when it comes in – currently 6 April 2026.
For limited companies
Companies House will be requiring more transparency on the filing of accounts. Small companies and Micro Entities will need to file a profit and loss account due to the new Economic Crime and Corporate Transparency Act. The changes aim to improve the quality and value of financial information on the companies register, prevent abuse of the corporate framework and better serve the needs of a 21st century economy. Unfortunately, this means small and micro entity companies will no longer be able to file abridged accounts.
All accounts will be required to be filed electronically. Keep in touch with your UHY adviser for updates on when this will take place.
How accounting software can help with your finances
Whatever your business size or structure, accounting software can help you streamline the finance area with benefits such as:
- Automation: Save time by automatically importing bank statement lines.
- Insights: Get up-to-date reporting on your finances.
- Accessibility: Access your financial data from anywhere, on any device.
- Compliance: Easily file your VAT returns and provide your accountant with the necessary information.
- Integration: Connect with other apps, such as till takings, stock control and purchase orders.
- Security: Keep your sensitive financial information safe with data encryption and secure backups.
Our expert team at UHY can help and advise you on the best accounting software and apps for your business, so you can focus on running your business more effectively.
The next step
For further information on the above, please contact Alison Martin on a.martin@uhy-calvertsmith.com, or your usual UHY adviser.
