The UK is a nation of entrepreneurs – more than four in five young people aged between 16 and 21 in the UK are interested in starting their own business. And according to new data compiled by technology entrepreneurs’ network Tech Nation; Britain is creating more $1 billion technology companies than any other country apart from the United States and China. Before reaching the stratosphere of unicorn status these companies were once smaller in scale, looking to expand and grow.
We know that small businesses – those with 0-49 employees – account for 99% of all private-sector firms and form the backbone and the very lifeblood of the British economy. But 50% fail in the first five years and digital is often the reason businesses succeed or fail.
According to McKinsey, integrated digital strategies will be the biggest differentiator between companies that win and companies that don’t. Adopting digital tools that are absolutely essential to any business looking to grow and succeed in the modern world.
Those who fail to adopt digital-first thinking risk losing the agility other businesses gain when they are more open to using digital behaviours. Without a progressive tech mindset, companies across all sectors may significantly hamper their prospects of long-term growth.
One of the ways in which small businesses can embrace technology is through the Government’s Making Tax Digital (MTD) legislation. From April this year, VAT registered businesses with a turnover above the threshold of £85,000 will be the first to have to maintain digital records and submit returns via software to HMRC.
If used to its full potential, financial management software can function as a fully-fledged business management platform, allowing you to keep oversight of everything from staff time to expenses.
It is not uncommon for firms to be resistant to change, making them slower to adopt new ways of working, particularly when it comes to tax compliance. This is certainly what QuickBooks has found when it comes to MTD.
There is no doubt that for some, achieving compliance marks a step change, but once they have made the change there are also countless advantages to making the move to digital record keeping, including access to near limitless reporting functionality giving a real-time view of financial health.
MTD is a huge opportunity to navigate digital adoption, to streamline operations, motor efficiencies and simplify tax. A study from Opinium research found moving to being MTD compliant is for the vast majority either quicker (42 per cent) or only as time consuming (44 per cent) as anticipated, with just 13 per cent saying it took longer than they expected to prepare for the move.
To highlight how straightforward the process is, QuickBooks has created an exhilarating video of a stunt driver speeding a black cab around an abandoned industrial estate with a businesswoman doing her taxes in the back. Paul Swift picked up consultant Naomi Timperley and drove her in a suped-up black cab to the site in East London where he performed handbrake turns, powerslides and donuts as she filled in her returns.
As digital tax is embraced, our challenge is to help small businesses and accounting professionals digitize the engine of their business to help them supercharge productivity.
By backing small business owners through the transition of MTD we can help accelerate cash flow management and allow them to get paid faster and run their companies more effectively.
Shaun Shirazian, Head of Product UK, Intuit QuickBooks