Friday 7 December 2012
The government has introduced plans to make it easier for small businesses to manage their tax affairs via an online messaging system.
As part of a drive to expand HM Revenue & Customs' online services over the next three years, the government said small businesses will be able to access all the tax services they need from "a personalised home page with secure digital messaging".
Other measures announced by the government include allowing small, unincorporated firms to manage their business finance by moving to cash accounting from April 2013, instead of the traditional accruals system.
Cash accounting involves paying tax on the amount of cash collected minus acceptable operating expenses.
It will be available for business with a balance of up to £77,000 who will be able to access the service until their receipts reach £154,000.
Clive Lewis, head of enterprise at the Institute of Chartered Accountants in England and Wales, told the Telegraph that the simpler system is useful for the smallest businesses but may not be so useful for bigger enterprises.
He was reported as saying: "At £150,000 you’re talking about quite a serious business that should be able to manage a profit and loss account, not just cash flow. Taking account of things like stock gives you good financial discipline."
The announcement follows George Osborne's Autumn Statement, in which he pledged to extend Small Business Rate Relief and introduced a ten-fold increase to Annual Investment Allowance up to £250,000.
Posted by Steve Williams