The importance of planning ahead for the next tax year
Posted on 29th March 2023
Planning ahead can not only help you stay organised and compliant but also enable you to maximise deductions, minimise liabilities and optimise your overall financial situation.
It is essential to take a proactive approach to managing finances and tax obligations.
By evaluating your income, expenses and tax relief, you can create a tailored strategy that will keep you on track and well-prepared throughout the year.
There are many steps you can take to reduce your potential tax bill, however careful planning is required. It is never too early to review your tax situation.
Business owners should consider the following for utilising tax reliefs and allowances to minimise their liabilities:
• Incorporation – Becoming a Limited Company could offer a more tax-efficient business structure.
• Capital allowances – From 1 April 2023 to 31 March 2026, the UK Government is implementing a 100 per cent tax deduction for capital expenditure on plant and machinery.
• Travel expenses – Companies can claim tax relief on travel expenses if they relate to a business justification. It is required to provide and keep these expense receipts.
• Reclaim VAT – If your business is VAT-registered you can claim VAT on items you use for business.
It is important to take a strategic and planned approach, and to help you plan for the new tax year, we have put together some top tips that will ensure a smooth transition for the year to come.
Keep your financial records organised
Maintaining precise and organised financial records is essential for a smooth tax filing process. Ensure you have documentation for all income, expenses, deductions and reliefs claimed throughout the year.
Staying on top of the records and keeping them organised through the financial year will make it easier to prepare and submit them at the end of the tax year.
Be aware of deadlines
Start thinking about deadlines early as penalties are imposed for not submitting legally required information on time.
Consider hiring a bookkeeper or accountant
Each industry has unique costs, benefits and tax reliefs. Employing an accountant who is well-versed in your industry will help you maximise your accounts and year-end review. This would help save time and increase your capacity to take on more clients and more billable work.
Thank existing clients
Year-end is a fantastic time to connect with your current clients. Share business highlights, express gratitude for their support and use the opportunity to showcase your specialities.
The more tailored the message, the more engaged and appreciated your clients will feel.
Know your numbers
Regularly tracking your numbers and financial performance will not only aid you in identifying potential risks but also in uncovering opportunities that can contribute to your future gains.
Planning ahead for the tax year and maintaining an organised approach is important for both individuals and businesses.
By proactively preparing for the tax season, you can optimise financial strategies, ensure compliance with legal regulations and minimise the risk of penalties.
Being organised and planning for the tax year is not only a wise financial decision but it is also an investment in one’s long-term financial stability and prosperity.
If you need any advice regarding your business, we are happy to help. Get in touch today.
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