How to Choose Accounting Software for a UK Small Business: VAT and Making Tax Digital
Making Tax Digital for VAT, HMRC-recognised software, late payment rules and what to check before you pick accounting software in the UK.
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UK small businesses choose accounting software mainly around VAT, Making Tax Digital (MTD) and cost. Here is a practical checklist.
1. Making Tax Digital for VAT
VAT-registered businesses must keep digital records and submit VAT returns through MTD-compatible software. That means software that can connect to HMRC's systems, either directly or through bridging software. MTD for Income Tax Self Assessment is also being phased in for higher-income sole traders and landlords. Check the current dates and thresholds on gov.uk.
2. VAT features
- Standard, reduced and zero rates, plus exempt supplies
- Flat Rate Scheme and cash accounting where you use them
- Digital VAT return submission
- A clear audit trail
Calculate a single transaction with the UK VAT calculator.
3. Company accounts
Limited companies also need year-end accounts and a Corporation Tax return. Look for a proper double-entry ledger and a Profit & Loss and Balance Sheet your accountant can use. Estimate tax with the UK Corporation Tax calculator.
4. Getting paid
Late payment is a common cash flow problem. UK businesses can claim statutory interest and fixed compensation on overdue business invoices. See the UK late payment interest calculator and measure your collection speed with the DSO calculator.
5. Budget and switching
Compare per-user and per-feature pricing, payroll add-ons and export options.
Where Pyalm Books fits today
Pyalm Books is currently UAE-first and does not yet offer HMRC MTD submission, so we are not the right choice for UK VAT filing today. We are opening up to other markets and add features based on what customers ask for. If UK support matters to you, email hi@pyalm.com or message us on WhatsApp. For general invoicing, inventory, POS and double-entry accounting you can try Pyalm Books free during beta.
Rules change. Confirm with HMRC and a qualified adviser.