Managing Your Taxes
Maybe you find dealing with the UK tax system daunting or gives you anxiety or maybe you just have no idea where to start.
With only a few weeks until the new tax year on 6 April 2023 here’s some top tips to help you manage your taxes;
1) Be organised
Make sure you keep track of all your financial information. This can be on excel or using software such as Xero or Quickbooks can make your life a lot easier by saving you time and stress!
You need to have the supporting documents available for all the transactions, such as the invoices and receipts.
Keeping track of this paperwork on a weekly basis makes it so much easier to complete your tax return.
2) File your return and pay your taxes on time
This may sound so simple and silly to have as a tip BUT this is the simplest money saving, anxiety reducing tip!
Filing your returns and paying your taxes on time can save you hundreds of pounds in penalties and interest and yet so many business owners lose out!
As a small business owner, you need to file tax returns with HMRC on an annual basis.
The deadline for online filing of self-assessment tax returns on 31st January following the tax year.
For this tax year, 6/4/22 to 5/4/23, it needs to be filed by 31 January 2024.
If any of the exceptions apply to you and you must submit a paper return, then your deadline is 31st October.
The deadline for corporation tax returns (which are for limited companies) are 12 months after the financial year end.
3) Saving for taxes
Ideally you would set aside money throughout the year to save for your taxes. But if you haven’t done this yet there’s two important actions to take.
a) Change that habit – from this week forwards set aside money each week to save towards future taxes by reviewing the income you have had that week and transferring a % to a tax saving account.
b) Complete your tax return early – even if you submit your tax return on 6th April you still have until 31st January 2024 to pay! Some people worry you have to pay it when you submit your return but you don’t, a brilliant benefit is you have longer to save and work out how to pay it. So don’t bury your head in the sand.
4) Create your own checklist
In April create your own checklist – review the year 6/4/22 -5/4/23. Write a list of every type of income you received and what information you need for the tax return.
Employment – you need the P60 or P45, P11d if you have benefits, maybe unclaimed expenses or mileage?
Bank interest – you need the bank interest tax certificate.
Then you can pull together all the information ready to sit down and complete your tax return or hand over to your accountant.
Take action now!
Once you have finished this blog, before you get distracted, pop to your calendar and book in a couple of hours in April 23 for your tax return prep.
Get ahead this year, manage your taxes. Take action now!
Thank you for reading this weeks blog – Managing Your Taxes In 4 Easy Steps.