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Accounting software

Accounting software is a computer programme that automates some bookkeeping and accounting tasks.

If you’re an individual taxpayer, accounting software helps you send invoices, keep track of your income and expenses, and also submit Self Assessment tax returns and VAT tax returns (if you need) to HMRC.

Do you need accounting software?

  • for most everyday taxpayers, a simple Excel spreadsheet of your income and expenses is sufficient
  • the only exception is for sole traders who are registered for VAT. In this case, you have to use software to report VAT starting this year. This is called MTD (“Making Tax Digital”)
  • accounting software does not replace the need for an accountant: the software only shows you what you earned and spent, and helps you calculate your tax. If you’re not sure how to claim something, what expenses you can claim, or which tax-free allowances you should take advantage of, you should still use an accountant.

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