Author: Glenn

For small and medium-sized enterprises (SMEs), adopting accounting software offers a range of practical benefits that help streamline financial management, reduce errors, and improve decision-making. Here are the key advantages:

Time-Saving Automation
Accounting software automates routine tasks such as invoicing, bank reconciliations, VAT calculations, and payroll processing. This reduces manual data entry and allows business owners and finance teams to focus on running and growing the business, rather than spending hours on admin.

Real-Time Financial Insights
Most modern platforms offer real-time dashboards and reporting tools. Business owners can instantly see cash flow positions, outstanding invoices, and profit margins. This helps with day-to-day financial decisions and longer-term planning, such as forecasting and budgeting.

Accuracy and Reduced Errors
Manual bookkeeping can lead to errors in data entry, calculations, or tax reporting. Accounting software includes built-in checks and reconciliation tools to minimise these risks. With fewer mistakes, businesses are less likely to face penalties or compliance issues from HMRC.

Simplified Tax Compliance
Cloud-based software is increasingly aligned with HMRC’s requirements, including Making Tax Digital (MTD). It helps SMEs maintain digital records and submit VAT and income tax returns directly from the system. This not only saves time but ensures timely and accurate compliance.

Better Cash Flow Management
With tools to track incoming payments, flag overdue invoices, and send automatic payment reminders, SMEs can manage credit control more effectively. Improved cash flow visibility makes it easier to plan for outgoings and avoid late payment issues.

Access Anywhere, Anytime
Cloud-based accounting software allows users to log in from multiple devices, enabling remote working and access for accountants or bookkeepers. This flexibility supports businesses that operate across locations or use outsourced finance support.

Scalability
Most accounting packages offer scalable features that grow with the business. SMEs can start with basic invoicing and reporting and add features like inventory management, multi-currency support, or project tracking as needed.

Integration with Other Systems
Accounting platforms often integrate with other business software, such as e-commerce, payroll, point-of-sale, and CRM tools. This creates a joined-up business system and reduces duplication of work.

Professionalism
Using accounting software can improve the presentation of invoices and financial reports, giving a more professional impression to clients, suppliers, and lenders.

In summary, accounting software helps SMEs improve efficiency, accuracy, and control, making it a worthwhile investment for sustainable business growth.

If you are still considering your software options, we can help. Call now…

On 8 May 2025, the UK government announced a landmark trade agreement with the United States, aimed at reducing tariffs and bolstering key British industries. This deal is projected to save thousands of jobs, particularly in the automotive and steel sectors, and marks a significant step in strengthening UK-US trade relations.

Key Achievements of the UK-US Trade Deal:

1. Reduction of Car Export Tariffs:
   The US has agreed to lower tariffs on British car exports from 27.5% to 10% for up to 100,000 vehicles annually. This move is expected to save hundreds of millions of pounds for UK car manufacturers, notably benefiting companies like Jaguar Land Rover.
2. Elimination of Steel and Aluminium Tariffs:
   Tariffs on UK steel and aluminium exports to the US, previously set at 25%, have been removed. This change reopens the US market to British steelmakers, providing a critical boost to an industry that supports approximately 80,000 jobs across the UK.
3. Enhanced Market Access for UK Farmers:
   The agreement includes a reciprocal arrangement allowing UK farmers to export up to 13,000 metric tonnes of beef to the US. Importantly, this deal maintains existing UK food safety standards, ensuring that consumer protections remain intact.
4. Removal of Tariffs on US Ethanol:
   The UK will eliminate tariffs on US ethanol imports, facilitating the entry of 1.4 billion litres into the UK market. This measure is anticipated to lower costs for UK industries that use ethanol, such as manufacturing and transportation.
5. Support for the Whisky Industry:
   The resolution of the Section 232 tariff dispute has led to the lifting of tariffs on American whiskey. This development is expected to benefit UK spirits importers and the hospitality industry, while also encouraging greater investment in the UK spirits sector by US companies.
6. Commitment to Ongoing Trade Negotiations:
   Both nations have expressed a commitment to continue discussions on broader trade issues, including digital services taxes and pharmaceutical tariffs. These ongoing negotiations aim to further enhance bilateral trade relations and address remaining areas of concern.

This trade agreement represents a significant advancement in UK-US economic relations, providing immediate benefits to key industries and laying the groundwork for future cooperation.

The government wants your say on e-invoicing. Quicker payments, fewer errors, and better VAT reporting are on the table. A 12-week consultation could shape the future.

HMRC and the Department for Business and Trade (DBT) jointly launched a 12-week consultation earlier this year. The consultation is examining the broader adoption of electronic invoicing (e-invoicing) across UK businesses and public sector bodies. This is the first time UK businesses have been invited to share their views on how e-invoicing could be implemented and scaled nationally.

E-invoicing refers to the digital exchange of invoice data directly between buyers and suppliers. It has the potential to reduce paperwork, improve productivity, and help businesses get their taxes right first time. Benefits include fewer data and invoicing errors, more accurate VAT reporting, faster payments, and improved cash flow.

An example cited by HMRC highlights how an NHS trust processes e-invoices within 24 hours, compared to 10 days for paper invoices, resulting in invoices being paid almost twice as fast, while supplier queries have dropped by 15%.

The consultation seeks input on key issues such as:

• different models of e-invoicing;
• whether e-invoicing should be mandated or voluntary, and the appropriate scope of any mandate; and
• the potential for real-time digital reporting alongside e-invoicing.

The government is encouraging responses from businesses of all sizes, software providers, and other stakeholders to help shape future e-invoicing policy and adoption strategy.

The government is consulting on new VAT relief for goods donated to charities for free use. Could this fix an unfair gap in current rules? Have your say by 21 July 2025.

A new joint consultation from HM Treasury and HMRC, titled “VAT Treatment of Business Donations of Goods to Charity” has been launched. The consultation seeks to gather views on introducing a VAT relief for goods donated to charities by companies to give away free of charge or to use in the delivery of their services. The consultation is open until 21 July 2025.

Currently, VAT relief applies to goods donated to charity for resale (such as in charity shops), but not to those given away free of charge or used directly in charitable services. The government acknowledges that this creates an inconsistency. While the existing rules were originally designed to prevent VAT fraud, the consultation explores options for better alignment without weakening fraud safeguards.

The consultation is split in to four main sections:

1. To gather information about respondents and their experiences with donating or receiving goods.
2. To examine current VAT rules on donated goods used for charitable distribution or service delivery.
3. To set out the government's aims and proposes the scope of a new VAT relief.
4. To explore options for administering the relief and seek feedback on proportionate administrative arrangements.

The government encourages responses from all stakeholders, including charities, social enterprises, manufacturers, retailers, logistics providers, and industry bodies.

HMRC has delayed mandatory payrolling of benefits in kind by a year to April 2027, giving employers and software providers more time to prepare. Penalties will be eased in the first year.

The requirement to report Income Tax and Class 1A National Insurance Contributions for most BiKs and expenses through Real Time Information (RTI) will now begin from 6 April 2027, rather than 6 April 2026 as previously announced.

From April 2027, employers will report BiKs and expenses via the Full Payment Submission (FPS), aligning with the method currently used for reporting salaries. The number of RTI fields will be expanded to reflect the data currently captured through P11D and P11D(b) forms.

The deferral is intended to give payroll professionals, software providers, tax agents and others additional time to prepare for the transition. From April 2027, employers will also have the option to payroll employment-related loans and accommodation on a voluntary basis.

To support a smooth rollout, HMRC will waive penalties for inaccuracies related to mandatory payrolling for 2027–28, provided there is no evidence of deliberate non-compliance. However, existing late filing, late payment penalties, and interest will continue to apply.

HMRC has confirmed that its Basic PAYE Tools software will also be updated to support payrolling of benefits in kind from April 2027.