Keeping your business finances up-to-date is no easy task. For many, the burden of well-kept finances, tax returns, and the general day-to-day running of their business can be a number-crunching nightmare.
To help you keep your records in order from the very start, we’ve gathered together some tax return advice to help you keep on top of your tax payments.
Although it’s not a strict requirement, setting up a business account makes it much easier to follow your income and outgoings. You’ll be able to track invoices, payments, bills, expenditures, and any required tax payments without getting mixed up with personal purchases.
It’s all too easy to chuck away those receipts without a second thought, but a lot of purchases can actually be put through as full or partial business expenditures. Car running costs, working from home, and bills can be put against the tax you owe, so it’s definitely worth checking what you can claim as an expense.
If you keep a good record of these transactions, it’ll be easier to prove your business expenses to HMRC.
We usually suggest that another bank account is set up to manage your required tax payments. Once you hit a certain threshold (approximately £11,000) you’ll be required to pay the full amount of tax. Taking 20% of your income and putting it into a dedicated account means that when the time comes to pay your tax, there’s no chance of it being less than what you owe. After taking business expenses into account, you might even have some extra funds left over to put back into the business or into savings.
Unfortunately, the laws on tax are constantly changing and are easily overlooked. We suggest checking up on the government’s Business and Self Employment website for updates and changes to the law. It may save you from an unpleasant shock when you get your next tax bill.
If you’re still unsure of a specific change to tax law, please feel free to give us a call to discuss and claim a free tax consultation.
Not only can a good accountant save you money, (enough to pay for their services and then some!) but they’re also counted as business expenses so they become even better value for money. Although it’s quite possible for you to sort your own accounts, having a professional accountant keep an eye on your business finances can help you keep more of the money you earn.
Finding it difficult to deal with HMRC? Need some tax return advice? We offer a variety of helpful accounting services to keep you and your business on top of tax. Just give us a call and we’ll have your accounts in order in no time!
Getting confused by your tax return? Looking for professional advice? Fill out the form below for your FREE initial tax return consultation.
TaxSail offers expert tax advice for clients who are self-employed or sole traders and need to submit a tax return. Our tax advisor, Hannah Smith, can also offer help with tax compliance and corresponding with HMRC.