Calling all small business owners!
It was the beginning of the new tax year on the 6th of April. As someone who's been through the highs and lows of running a small business, I know how overwhelming tax season can be. But fear not! I'm here to share some tips to help you breeze through your tax return and keep your accounts in tip-top shape. Here we go:
1. Stay organised:
Set aside dedicated time each month (or every two weeks if you have time) to update your financial records. Keeping track of your income and expenses regularly will save you a ton of stress when tax time rolls around. It will also help you to see growth or if you need to change your approach to how your small business.
2. Separate Finances:
Get yourself a business account or a separate current account! You don’t want to be mixing personal and business expenses, you will end up spending so much time working out which is which. I would recommend staying away from business banking you have to pay for if you're just starting off or if you have a small business - there is no point wasting your money!
3. Simplify Bookkeeping
If you're small like me you don’t need fancy accounting software. Just invest time in creating an Excel spreadsheet or Google Sheets cash flow sheet. This should show money coming in and out - sales and expensive, opening and closing balances from month to month. However, QuickBooks or Xero to streamline your bookkeeping process too from what I hear from other small business owners. These tools make it easy to record transactions, generate financial reports, and stay on top of your taxes.
4. Keep receipts and invoices:
Make sure to keep all your receipts and invoices organised and filed away. These documents are crucial for claiming deductions and proving your business expenses. I buy a lot of my supplies online these days and a lot of websites let you pay with PayPal. PayPal saves your invoices and receipts to your account, saving you time in the long run as well as ink and page.
5. Consider Help:
If numbers aren't your thing, don't hesitate to hire a professional accountant or bookkeeper to help you with your taxes. They'll ensure everything is done correctly and can offer valuable advice to optimise your finances. Or ask a friend and family member to help. I’ve shared my Excel document with a couple of friends over the years, don’t be embarrassed to ask for help. Don't be embarrassed about talking about your business or finances, let's get over the taboo about money!
6. Plan Ahead:
Don't wait until the last minute to start thinking about your taxes. Start planning ahead and set aside money throughout the year to cover your tax bill. This way, you won't be caught off guard when it's time to pay up. I will be filing my 2023/2024 self-assessment tax return in the next few weeks. This gives me time to pay off the tax I owe in monthly instalments before January 31st!
7. Expense Wisely:
Understand what you can and can’t expense for your business, but don't hesitate to take advantage of eligible deductions. Keeping a keen eye on allowable expenses can help reduce your taxable income, so be proactive in maximising your deductions.
Remember, staying on top of your finances is key to the success of your business. By following these tips, you'll be well-equipped to tackle your tax return like a pro!
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