Running a business is no mean feat, with owners having to juggle a number of different hats on a daily basis. Tax may not be the most exciting part of running your own company, but it’s an unavoidable responsibility that we all must tackle at some point.
To help you get to grips with the subject, here are six practical tax tips to help you stay on top of your finances:
1. Submitting essential paperwork on time is crucial, especially when it comes to your tax returns, accounts and Companies House information. Any errors or late submissions could result in a penalty and increase the chance of an HMRC investigation.
2. Knowing what you’re entitled to claim for is hugely beneficial, from capital expenditure costs to assistance with business rates. The Annual Investment Allowance (AIA) scheme, for example, enables firms to claim 100 per cent tax relief on qualifying expenditure up to the value of £500,000. Whether its telephone expenses, travel subsidiaries or equipment purchases, it’s important that you utilise the various savings and schemes on offer.
3. HMRC recommends that businesses should retain evidence of all transactions for at least six years. Be sure to store accurate receipts, invoices, payroll information and key documentation in a safe place.
4. Smaller companies that are VAT registered may benefit from the flat rate scheme. Available to those with an annual turnover of less than £150,000, it offers a simpler way of accounting for VAT transactions. Under the flat rate scheme, you apply a fixed percentage (depending upon your sector) to your yearly turnover and pay this to HMRC, rather than calculating the input and output VAT on each transaction.
5. No one likes an unexpected tax bill, which is where effective forecasting comes into play. Knowing exactly what is going in and out of the business each month will help you to prepare early so you do not come unstuck as tax deadlines loom.
6. A good accountant can be one of your business’ most valuable assets. As trusted advisors, we help our clients ensure their company becomes as cost effective as possible to help maximise profit and income, whilst also freeing up a significant amount of their valuable time by eliminating the administrative burden. Hiring a good accountant will also help to alleviate some of the stress associated with running a business.
To see how Champion Accountants can help your business, contact our group tax director today on Gill.Molloy@championgroup.co.ukor call 0161 703 2500.
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