For all businesses, particularly in today’s economic climate, every penny counts, and making the most of all the tax savings for which you are eligible should be a vital part of your bookkeeping process. Every business will have its own specific entitlements, and keeping abreast of these can save a surprising amount of money to boost cash flow. Years of experience in helping businesses maximise profit have given us plenty of insight, so below are some of our tips for effective bookkeeping strategies to guarantee optimisation of your tax allowances.
Do your research
This is number one on the list because you can’t implement a strategy unless you know exactly what you’re dealing with. If you set up an online business account with HMRC, you’ll be able to see all your business taxes in one place and get up-to-date details of your VAT, PAYE, self-assessment, corporation tax and many other business taxes.
Check all relevant tax deadlines
This should be part of your research. Knowing what needs to be paid and when makes for an efficient process which won’t be liable for late payment fines. For example, if you’re a sole trader undertaking self-assessment, you’ll need to note these dates:
- 31st January during the tax year (6th April – 5th April the following year) is the deadline for your first advance payment.
31st July after the end of the tax year is the deadline for your second advance payment. - 31st January after the end of the tax year is the deadline for filing a self-assessment tax return online.
- 31st January after the end of the tax year is the deadline for paying any national insurance and income tax which is due.
Claim all your allowable expenses
Ensuring you claim all of these can make a huge difference to cash flow. These can include:
- Business travel costs – fuel, mileage, parking charges, bus, train or plane fares, subsistence costs such as food and drink and overnight stays.
- Office expenses – stationery, phone and internet bills, postage, rent, gas, electricity and water bills for your premises and insurance. You can also claim for the cost of staff uniforms.
- Marketing costs – if you pay to have a new website designed or brochures and flyers printed these costs can be claimed.
- Stock and raw materials – you can claim allowable expenses if you purchase these in order to make a product to sell on.
- Training courses – any relevant CPD or other training courses are also under this remit, as are professional subscriptions.
Claim any capital allowances
These are tax deductions which cover the purchase of certain business assets such as manufacturing machinery and company lorries, vans and cars used solely for business. There are also allowances under this heading for renovating business premises in disadvantaged areas in the UK, the extraction of minerals, research and development work, dredging and patent rights, among others – we did say it was important to do your research!
Take a look at employer pension contributions
Under the UK Pensions Act 2008, every employer in the UK must enrol certain staff into a workplace pension scheme and pay into it. These contributions are tax deductible.
Finally, as we always emphasise to our clients, make sure you keep accurate records as it will save you a great deal of time when you’re calculating your tax. Just to make things more complicated, tax law doesn’t stand still and, as a business owner, you need to be aware of frequent updates. Using a bookkeeping service can take a weight off your mind – at AMR Bookkeeping Solutions we work closely with our clients to ensure every business, with its individual characteristics, maximises its tax deductions to the fullest extent. We’d love to help you – why not give us a call on 01892 559480 or get in touch through our website?
