AAT: 5 best practices for modern-day legislative compliance

This content is brought to you by Xero.

Compliance is tricky – not just because of tough rules or strict deadlines, but because legislation frequently changes. And accountants and bookkeepers have a responsibility to keep up.

Here, we look at some of the best ways you can maintain compliance with tax laws and regulations.

1.   Follow changing legislation

Finding resources that keep you clued in on legislative change will help you adapt to new rules. You could try:

• Podcasts, webinars, and other resources from trusted accounting bodies
• Professional groups on LinkedIn
• Email newsletters
• Industry magazines and journals

You can also sign up for HMRC’s email updates on the topics that matter most to you. This is a simple way to get the information you need in your inbox (without searching for it).

The right accounting software can also help you keep up. Xero gives you real-time updates and automatic tax rate adjustments, so your software is always fit for the latest changes.

2.   Automate tax preparation

Traditionally, preparing tax returns and sets of accounts required multiple systems and disconnected processes. Data in one place needed to be manually typed into a separate system.

Today, modern accounting software uses automation to speed up tax and accounts preparation. Bookkeeping data flows through to Xero Tax, so returns are populated with client information automatically.

Xero also integrates with HMRC and Companies House, meaning you can make submissions directly from the software. Plus, our live testing feature lets you double-check the return with HMRC before submitting.

3.   Centralise all data

Storing data in multiple places makes it harder to complete compliance tasks. You might spend hours checking several systems to find information.

Storing everything in a single piece of software means it’s easier to retrieve information, you have complete oversight, and a safe space for sensitive data. Plus, digitising client documents such as invoices and receipts can support compliance with MTD digital linking rules.

Xero software keeps data secure, and provides everything you need to reconcile statement lines, draft returns, and submit them to HMRC or Companies House.

4.   Monitor payroll updates

Be sure to check for new HMRC guidance and government statements for updates to payroll legislation. Your accounting software can also help you keep up.

New minimum rates of pay and National Insurance contributions are automatically updated in Xero. But you can also make adjustments manually in Xero – for example, setting a new rate of pay for your client’s team.

Xero automatically calculates pay and deductions based on the rates in place. To save you time, Xero automates real-time information (RTI) submissions and sends details to HMRC after every pay run.

5.   Audit your compliance approach

A regular internal audit can uncover opportunities for improvement and processes that need adjusting before the next tax year.

Gather information on your processes and systems, and the legislative guidance and industry best practices to follow. Evaluate processes and systems against this guidance, and build a plan of action.

Use Xero to make your audit more reliable and comprehensive – draw on our vast range of practice and client reports and dashboards for bookkeeping, tax, payroll, and team productivity.

Software for simple, effortless compliance

Compliance is a fundamental part of running a practice, but it shouldn’t take up all of your time. Following these best practices, you can take care of compliance easily, and gain a few hours back.

If you’re not yet a Xero partner, visit our Xero Partner Programme where you can find out more about becoming a partner and join over 200,000 accountants and bookkeepers using Xero in their practice. Get the tools and resources you need to succeed.

This content is brought to you by Xero.

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