All businesses must submit a tax return in order to declare income and profits to HMRC and to declare any tax due. Failure to submit tax returns on time can result in penalties and interest. Corporate entities have to file a Corporation Tax Return (CT600).
As a business owner, it is important to keep on top of everything, to ensure that you don’t end up being bogged down in paperwork and also being involved in any last-minute scrambles to meet tax deadlines. These headaches are easy to avoid as long as have prepared correctly.
How you should prepare
Consider getting prepared as an ongoing process rather than something that has to be dealt with all in one long sitting at the end of the tax year. File your paperwork as it arrives rather than having to sort through it from scratch at the end of the tax year.
Self-employed business owners are taxed on their business profits after deductions for expenses. In order for this to be accurately assessed, you need to be able to track each and every transaction your business is involved in. It is inevitable that invoices, statements, and bills will mount up and the pile of unsorted paperwork is only going to get higher the longer you leave it.
Intelligent bookkeeping
A simple spreadsheet may suffice in the early days especially when the business is young and transactions are small, but as activity increases and bookkeeping starts to eat into more of your valuable time, it may be best to outsource the tasks to a payroll provider. Leaving it to the experts will ensure that the work is both completely accurate and delivered in a timely manner.
Deductions: get everything in place early to avoid losing your entitlement
Travel costs, using your home as an office, phone bills, overdrafts, capital allowances on equipment and of course wining and dining prospective clients, all of these are business expenses.
Easy Checklist
- Keep your receipts: otherwise, you are at risk of under-calculating your business running costs.
- Get organised: make sure you have a system in place for retaining receipts and logging transactions as they happen.
Get advice: as your business grows, as transactions become more complex and you consider taking on staff, expert accountancy advice can help save you money in the long run.