With the introduction of Making Tax Digital in 2018, HMRC are slowly phasing out the ‘paper’ required to complete and submit your tax return. This doesn’t mean you have to supply less documents and records, but you can supply copies of certain paperwork, including your business expense receipts, in a digital format.
How can I digitise my reciepts?
There are many apps and online software that will help you to quickly and easily manage your expense receipts.
An app works on your mobile phone and allows you to ‘capture’ or take a photo of your receipt. You can add additional information such as the expense type and then upload to an online accounts in under 30 seconds. Super fast and convenient – you can take photos of your receipts on-the-go. At the train station or airport, in a café, restaurant or hotel.
Once uploaded, you can log into your online account at a convenient time and complete and submit your claim, sending it straight to your accounts department or accountant.
Backups and secure file storage
HMRC requires businesses to retain their electronic records for a minimum of 6 years, so storing your digital files and accounting information securely is essential. Most Expenses software can be integrated with your existing accounting or document management systems. With a Document Management system, files can be backed up and stored securely. There is the added advantage of indexing files so they are fully searchable should you need to locate them quickly in the future.
Utilising technology to manage your expenses is also more environmentally friendly and usually saves time and money too.
What files can’t I digitise?
There are some exceptions. If you receive a document that shows tax that isn’t VAT, e.g. a bank interest certificate, the document must be stored in its original format. So, if the document was sent to you as a paper certificate, it must remain as a paper certificate and not be digitised. But, if the certificate was emailed to you as a pdf, you can retain the digital pdf file. It’s worth noting, however, that you may not alter or change the file into another digital format, e.g. a jpeg.
What should I do with my paper receipts once I’ve digitised them?
Once your claim has been submitted electronically, you no longer have to keep the paper receipt. Which means you don’t have to hang on to piles of receipts. Another advantage of using an Expenses app, is that it’s easier to sort out your expense receipts and claims as you go, so you are not left with hours of work to do, managing your expenses at the end of the month. And the sooner you submit a claim, the sooner you can be reimbursed.
Once it becomes part of your routine, we think you’ll find digitising your receipts is a much easier, quicker way to manage them.
If you would like to know more about our Expense solution and mobile app, please give us a call on 01285 810606 or email jack.wright@yourdms.net and he will be happy to talk or arrange a demo.
Test drive it for yourself and take part in our 2 month free trial.
