Keeping ahead of the taxman
It’s essential to keep accurate records of the money passing through your business. Not just for the tax man but for you the owner, so that you can effectively manage the business.
Set up a good recording system ready for the launch of your business and save all receipts from the word go.
1. Minimising your tax bill. There are strict rules about tax so make sure you get it right. But don’t be afraid of the tax man as he is more interested in helping you get it right than chasing you to pay a fine.
2. To be or not to be – VAT registered. Check with an accountant or call HMRC for guidance on registering for VAT. More especially talk to an accountant about which VAT scheme is best for you – standard or flat rate?
The threshold for registering for VAT for 2015/16 is a turnover of £82,0000 per annum. But it could be to your advantage to register for VAT if your turnover is less per annum. So check it out and make friends with the tax man or at least an accountant.
3. Putting a bit aside – for a rainy day and tax bill. It’s always a good idea to put a little cash aside ready for your tax bill. By doing this monthly, and even incorporating an expenditure line on your cash flow, will help you avoid getting caught out when that reminder lands on your doormat. Even consider setting up a separate bank account to take care of things, after all it is safer than jar in the cupboard.
4. Keep your finger on the pulse. Make sure you submit your accounts, tax returns and companies house paperwork (if you are a limited company) accurately and on time to avoid penalties or a visit from the tax man.
And remember that, even though your accountant may sort out and submit information on your behalf, you need to know what’s what. Especially if you are the company director who is ultimately responsible for any errors or missed deadlines.