As the self-assessment tax deadline looms on January 31, FreeAgent's Chief Accountant, Emily Coltman FCA, shares invaluable tips for small business owners. With a surge in festive tax submissions last year, this guide aims to help businesses avoid penalties and navigate the complexities of tax returns efficiently.
Here are some simple tips that business owners can use to get their self assessment sorted. These include:
- Assemble Your Paperwork First: Completing your tax return is more manageable when broken into smaller tasks. Start by gathering essential documents such as P60 and P11D forms, bank interest certificates, pension income details, and records of any Gift Aid donations. This initial step lays the foundation for a smoother filing process.
- Make Sure You've Got the Right Year: Precision matters in tax filing. Ensure all collected paperwork corresponds to the correct tax year, ending on April 5, 2023. This includes scrutinizing forms like P60 for accurate salary and recognizing that, for the self-employed, business profits are the taxable income.
- What's the Right Amount of Bank Interest? Accuracy is key when reporting bank interest. Include the total interest due to you in the tax year ending April 5, 2023. If you share a joint account, report your portion of the interest. For business accounts, the interest belongs on your tax return, unless operating as a limited company. Exclude ISA interest from your tax return.
- Marriage Allowance: To Give or to Receive? Understanding the nuances of marriage allowance is crucial. Non-taxpayers can transfer their personal allowance to partners paying basic or intermediate tax rates. Ensure you correctly input this information on your tax return to optimize tax savings.
- Don't Wait Till the Last Minute! Procrastination is the enemy of accuracy. Avoid last-minute errors by starting your tax return early. Waiting until the end of January may lead to mistakes and possible logjams in HMRC's online filing service. Beat the rush for a stress-free submission.
Mastering these steps sets the foundation for a seamless tax return process. Now, let's delve into additional considerations to ensure your small business maximizes returns while minimizing stress.
In the face of economic challenges, small businesses must navigate tax responsibilities diligently. By following these tips, you empower your business to make informed decisions, avoid penalties, and secure a smoother financial journey. For personalized assistance, consider scheduling a consultation with Elena Meskhi and her team.
Ready to optimize your tax strategy?
Schedule a consultation with Elena Meskhi and her team. Gain expert insights tailored to your business needs and ensure a stress-free tax season. Your financial success begins with proactive planning – book your consultation now!
