Tax Tips for Small Business
Being tax compliant is not an easy task and when the task in hand is filing for business, it becomes even more overwhelming. If you are a small business owner and worry over your tax deadline obligations, you need to stop worrying and read this piece. Here are a few tips to help you cope with the filing deadline minefield.
Choose a Payroll Software That Works For You
Running a payroll is a vital part of many small businesses and it’s important you get it right. Getting it wrong can lead to substantial penalties. Real Time Information (RTI) submissions are now mandatory in the UK and as such, payroll software is essential. But make sure it’s the right software for you. Choose one that does everything you need it to but that you understand and can be confident in using it. Failing to understand how to use your software could lead to errors and penalties.
Keep a Distinction Between Your Personal and Business Finances
A common mistake made by small business owners is confusing their personal finances and funds with their business ones. The best thing is to have separate bank accounts, as well as separate credit cards for personal and business use. This will make organisation of your taxes easy when the time comes.
End of year tax return filing deadlines (be them self assessment or corporate) won’t be gruelling if you have prepared for it during the course of the year and not left everything until the last minute. Here is what you can do to get organised:
Organise your paperwork into labelled folders divided into months. They should include all the sales invoices, purchase invoices and all other important documents;
Take some time each month to reconcile your bank accounts and credit cards with your paperwork. This will save you the time and effort of doing it all in a single sitting;
Keep a track of what sales invoices have not been settled;
Keep a track of what purchase invoices you have left to pay.
Using these steps to stay on top of your paperwork will not only make meeting your tax return deadline less onerous but it will also help you to manage your business more effectively.
Keep a Track of Your Income and Expenditure
As a small business that pays tax, it is important to keep a track of all your income and expenditures. It is not easy to keep a manual record of these. Accounting software can help you to stay on top of it all. By recording all your income and expenditure on a piece of software there is often not a huge amount of work needed by your accountant to produce the year end financial statements. It means you can get your books to your adviser in plenty of time for them to meet the deadline. It also means you can keep track of your profits during the year keeping you informed of what your tax liability might be for the year.
It is important as a small business owner to prepare for your tax deadlines and do the necessary throughout the year. If you keep it all for the end, it is going to take a lot of time. Now that we have provided you with a few tips to help keep you on top of those deadlines it is up to you to make use of them. As a small business, you cannot afford to pay hundreds of pounds in penalties just by committing some common and small mistakes. Be vigilant and organised and you’ll be doing the best you can for the success of your business.