In the same way as new year’s resolutions of healthy eating and starting gym are needed at the start of calendar year, New tax year is the best time to get your business in shape by setting targets and goals for the year ahead.
This tax year commencing on 6th April 2020 is not like any other new tax year with so much going on with the country being on lockdown and the Covid-19 situation but at the same time this is the best time for business owners and executives to think and adapt practices which could improve their business’s financial and operational health during tax year 2020/21
Here are some suggestions which we consider to be helpful for this new tax year,
Claim all your expenses
Having clear understanding of allowable business expenses i.e. expenses you can claim and those you can’t claim will help you lower down your reported profit. This will reduce the amount of tax you pay and will ultimately maintain your cashflows and will keep your business running.
Paying expenses own pocket disrupts your cashflow hence it is important that you keep record and claim all allowable expenses. There is a wide range of expenses you can claim some of which are,
- Office equipment
- Software
- Stationary
- Stamps
- Computers
- Business mileage
- Working from home
- Work uniform (as long as it carries the company logo, clothing for personal use cannot be claimed, and general business attire cannot be claimed as a uniform expense.)
- Protective work clothing (e.g. eye goggles, if it’s a business necessity)
- Some forms of travel (e.g. journeys that are made for work purposes outside of your normal commute)
If you are not sure what expenses you are entitled to and what not, you can also
consult us for a better assistance and guideline.
Improve your tax efficiency
Being an owner of your small business, you must have to be adaptive to the tax changes as every year new tax policy gets released by the government. This tax year, however, no major changes in tax legislation have been announced for the next 12 months. So, our wise piece of advice for the small business owners, at this stage would be to get accustomed to some of the tax rates so you’re prepared for all eventualities.
To improve your tax proficiency, make sure that you are taking the most tax efficient combination of salary and dividends.
With Covid-19 outbreak and lockdown things are a lot different this year, governments help for businesses in these difficult times can be found here
Get ahead of your tax deadlines
Meeting tax deadlines must be a priority for every business. Our advice, however, is to do your self-assessment tax return early. You shouldn’t wait for the deadline to come and file your tax return then. This will in turn help you lessen your work load.
Here are some of the tax deadlines for the owners of the limited companies as well as Sole Traders, but ideally you shouldn’t wait for these tax deadlines and do your tax returns as early as its possible. Some of the key tax deadline are as follows,
- Submit P11D form by 6th July
- Pay second self-assessment tax instalment by 31st July
- Submit your VAT return one calendar month and seven days after the end of the VAT period
- Self Assesment Returns; 31st October for paper returns and 31st January for Online returns
- Keep yourself updated and make yourself organized while keeping your records
In order to succeed as a business, it is important to stay up-to-date, organized, keep record of your payments and receipts whilst keeping your books simple and clean. The start of this new tax year is a feasible time for you to reorganize and manage all your company’s records.
Use effective and updated software to keep all your accounting records. In this age, there is a choice of various softwares which can store all your records and business documents without breaking the bank. These softwares can also help you with planning by providing useful financial and operational information whilst saving time and admin expenses.
Consult an Accountancy Professional
Getting an accountant can help ease stress, your accountant will help you in preparing and filing your accounts along with tax returns before the deadlines, keep your books clean, provide assistance on claiming allowable expenses, provide you important strategic and financial information, deal with HMRC on your behalf and will also keep record of your revenues and expenses.
Looking or an accountancy professional you can rely on without breaking your bank?
Get in touch with us as we have packages for every budget and would would be pleased to cater your needs.
