As the current fiscal year draws to a close, it’s important, especially for small businesses, to make sure that everything is prim and proper before the next tax year begins.
It’s important to be up to date for the obvious legal reasons, but if you can get ahead of the game then you’ll be well positioned to maintain any success you’ve had going forward.
So how do you do that?
Preparation is key
Before you even make a start it’s important to know when you need to be up to date for. Don’t forget that you’ll be carrying out this extra work on top of your normal day job.
However, if you can create a countdown leading up to the end of the fiscal year towards the end of your final quarter, then neither you or your employees will have to worry about falling behind.
Documents are vital
Any document that gives evidence of financial transactions or account details needs to be properly stored and ordered so that you know exactly where it is. This goes for bank and credit card statements too.
All of this means that you have concrete proof of any expense claims you make and that all your business is taxed at the appropriate level. Speaking of which…
Know what your expenses are
If you’re running a small business then you should know exactly what’s going in and out of your company (which is why the previous step is so important) that way you can be sure you’re not paying more than you need to.
Currently, the HMRC defines an expense something that is ‘wholly and exclusively’ for use by your business. This means that as long as you’ve only used the item/service in question for your business then it’s eligible for Corporation Tax.
So make sure you have all of this in order.
What about your employees?
Don’t forget that one of the main ways HMRC will check that you’ve done your calculations correctly will be through an examination of the payroll. If your employees have changed or if they haven’t expensed things correctly then it is the business who is at fault, not the employees.
If anything doesn’t seem right in this department then you could come with a few additional fees for things including but not limited to National Insurance deductions or incorrect taxations.
Don’t forget your VAT
Another important step that you can’t afford to miss out is your VAT. If your company is VAT registered then make sure you include copies of your VAT returns complete with their workings out.
This will allow the HMRC to make sure that you’ve handed over all the correct information and allow them to reconcile your VAT position.
Copies, copies, copies
This isn’t so much advice for the end of the fiscal year as it is for every aspect of life, both business and personal. Make sure you’re creating copies of everything you do, that way you can protect yourself against any unfortunate losses, additional questions, or maybe for when you just want some reading.
Making sure that you have copies of everything you’ve collected is a great habit to have and covers all your bases going forward.