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Why you should use online accounting software

Over the last 6 years there has been a technological revolution in online accounting software.

As an accountant, we need access to your bookkeeping information so that we can prepare limited company accounts or personal tax returns. Before online accounting software we would have to wait for a backup of your data to arrive by post and then while we were working on your data, you wouldn’t be able to work on it at the same time.

The advantages of online accounting software

With online accounting software we now have immediate access to bookkeeping data and more importantly you can carry on invoicing your clients at the same time as we are preparing the relevant returns. And, if we have a query about a particular transaction or you need help with something, we can both look at the data at the same time.

Reporting to HMRC

Using online accounting software makes reporting to HMRC much easier for tasks such as VAT returns and monthly payroll. Some of the online software providers are now enabling the submission of personal tax returns directly to HMRC from their packages.

With Making Tax Digital (MTD) just around the corner, more and more taxpayers will have to report quarterly to HMRC and it is expected that HMRC will only accept data in a certain format that cannot be provided from something like Excel.

From an accountant’s perspective the most important aspect of clients using online accounting software is the accessibility and visibility of clients’ bookkeeping data.

Accounting software options

There are a lot of choices available for online accounting software most of which have free trials so that you can try it out before you subscribe to it. All of the online accounting software is paid by monthly subscription with no fixed contract term which means that you can cancel your subscription at any time if you need to.

Some of the packages our clients use include:

The final point about online accounting software is that the software provider always ensures that everyone is running the latest version, so you won’t have to worry about spending a lot of money on new software or upgrades.

If you need any further information or clarification on the online accounting software options available please contact us.

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Breaking even – checking the numbers

In previous newsfeeds we have described how you can calculate the level of turnover you need to create in order to meet all your costs whether they be fixed costs (rent, rates etc.,) or variable costs (goods you need to buy to convert into goods you sell).

For example, if your fixed costs are £50,000 per annum and your variable costs are 25% of your turnover, the annual turnover you need to breakeven will be £200,000. The formula is:

Annual fixed costs divided by 25 (the gross profit)

Bereavement Support Payment

The amount of Bereavement Support Payment you can claim will depend on your relationship to the person who died and when you make your claim.

Your payments will be paid into your bank, building society or credit union account.

If you were married or in a registered civil partnership with the person who died

If you were receiving Child Benefit when your partner died (or did not get it but were entitled to it), you will get the higher rate.

This is made up of:

a first payment of £3,500;

Tax codes for employees

The P9X form is used to notify employers of the tax codes to use for employees. The latest version of the form has been published and shows the tax codes to use from 6 April 2023. The form states that the basic personal allowance for the tax year starting 6 April 2023 will, as expected, be £12,570 (£12,570 in 2022-23) and this means that the tax code for emergency use will remain at 1257L.

The basic rate limit will be £37,700 (£37,700 in 2022-23) except for those defined as Scottish taxpayers

Properties not let at commercial rates

There are special rules where a property is let at less than a commercial rate or isn’t let on commercial terms. These rules also apply if a property is occupied rent free or at less than a commercial rate, for example, a property is occupied by a family member at a reduced or nil rent.

In these circumstances, HMRC can take the view that unless the landlord charges a full market rent for a property and imposes normal market lease conditions, it is unlikely that the expenses of the property are

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