Are you a small business coming up to your year end? Here are some HMRC-Owning tips for you to think about before your end of year.
It’s important to read and take note now – most of these need to be implemented before the end of the year – leaving it until it has passed could be too late!
If you’re planning on purchasing any big or expensive stuff (assets, like computers, machinery, a van etc), or any marketing type things, do it now, before your year end, rather than just after. That way, you get the tax relief now, rather than in a year’s time.
If you’ve just done some work for a client/customer, and it won’t upset cash flow too much, try invoicing the day after your year-end, rather than before (for example, on 1st April if your year end is 31st March, rather than 31st March). The difference of one day shouldn’t hurt your cash flow too much and it’ll mean you’re taxed on that sale next year, not this year (and then do the same next year!)
If your wife/husband, partner, mistress or whoever has helped you out in your business over the year (such as filing paperwork, sweeping the floor, whatever), you maybe able to pay them a small amount to use up her otherwise wasted allowances (and it’s tax deductable). This could either be by way of a salary or dividend.
Whoa! We mean charity. If you have (or want to) give money to charity, make sure it’s a local one. Then, any donation you give will be tax deductable and you’ll save the Corporation Tax on that value at the current rate.
The boring one. If you’re a limited company, any amounts you put in to a personal pension can be treated as tax deductable – so maybe it’s time for a lump sum?
Do you record business mileage? If not, you probably should. Rather than claim the cost of fuel, it’s usually more tax efficient to claim 45p per mile – most clients who do this save at least an extra £500 a year off their tax bill. All you need is a mileage log. We’ve got one here.
If you’re planning on paying staff a year end bonus, make sure it’s paid before the end of year, rather than just after. That way, you can claim it now, rather than next year.
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