They say that tax doesn’t have to be complicated. We hear this time and time again when the end of the tax year comes around – but the truth of the matter is, especially for small businesses and start-ups that may have never had to deal with financial matters on this kind of scale before, tax can be incredibly taxing.
That’s why it’s so important, especially when launching a new venture, that you have Hounslow accountants like Fusion there to offer support and guidance as and when it’s needed… or you could find that you fill those forms out incorrectly, file your returns late and grow increasingly stressed with the process – all of which could result in a fine for you and your company.
To help you get off on the right foot where your tax returns are concerned, here are some top tips from the professional accountants here at Fusion designed to help you feel more confident when it comes to the financial operations of your brand.
Remember the deadlines
Putting the tax deadlines in your diary is an absolute must if you don’t want to file your returns late and want to avoid paying a penalty for doing so. You might think that your memory is good enough and you’ll be able to remember each and every year, but it’s best to stay on the safe side and note them down regardless.
If you’ve never submitted a return before, you need to register with HMRC (which can now be done online). Paper tax returns have to be filed by October 31st. So for returns that relate to the tax year running between April 6th 2018 and April 5th 2019, all paper returns need to be in by October 31st 2019.
Those of you choosing to file online need to send their returns in by January 31st. So for the tax year April 6th 2018 to April 5th 2019, you can file online up to January 31st 2020.
If you fail to meet these deadlines, you’ll likely incur a £100 fine for being up to three months late. These fines will increase if you’re later than three months.
Practice good bookkeeping
Knowing what you’re doing where bookkeeping is a must so you can see at a glance what’s going on with your finances – and as a self-employed business owner, you’re required by law to keep your financial records for five years, regardless.
Maintaining your business records will save you both time and money, so it’s simply a matter of sitting down and working out what method is the most effective for you and your team.
Consider tax avoidance
Don’t be afraid to try and work out the best ways in which you can save money on tax. Yes, it’s illegal to evade tax but it’s wise to avoid it from a business perspective.
Read up on tax allowances for self-employed businesses on the official government website – there are tax-free allowances for savings interest, dividends if you have shares in a company, and you may also have allowances for your first £1,000 of income from self-employment (known as your trading allowance).
Don’t forget that if you work from home, you could also claim a percentage of your household expenses like council tax, gas and electricity, all based on how many hours a month you spend working at home.
Set aside a monthly amount
You’ll always have to pay tax, this is a sad fact of life. But you can soften the blow by setting aside the right amount each month from your earnings. No one wants to have to pay out a huge amount come January after the excesses and expenses of the festive month of December – so do yourself a favour by putting some cash away each month.
Seek help if needed
You don’t need to go it alone and there are accountants out there that can help you by doing the legwork on your behalf. Qualified accountants can do your bookkeeping and ensure that everything is as it should be, making sure that you’re paying the right amount of tax and freeing up your time to devote to the actual running of your company.
If you’d like to find out any more of the above and to see how we could help you drive your business forward, get in touch with us today.