No-one likes to discuss taxes for business but it is a topic which must be addressed.
As a business owner, you need to make sure that you are always going to nail your taxes the first time to avoid paying too much or being hit with fines for not paying enough. Here are some of the things you can do to make sure that you are managing the taxes your business has in the best possible manner.
Check to see what tools there are
There are plenty of tools out there which are made for business to help simplify the issue of tax. By making tax digital, you will be able to manage your accounts online and fill in some prewritten tools which will make the entire process even easier. MTD for VAT has streamlined the entire process to make it more accessible for any business owners. Even if you have very little idea about what to do to pay your taxes, you will feel supported thanks to the tools they have on offer.
Find a good accountant
If you don’t want to handle your taxes yourself then you need to find someone who can do it for you. You should always find an actual licenced accountant instead of trusting someone else to do it for you. Just because your friend can balance the books for her business doesn’t mean that you can trust her to do yours too.
A fully qualified chartered accountant will always be your best bet. They can properly advise you on every step you need to take and will make sure that your taxes are properly paid.
Keep records of everything
You are going to need to turn your records over to your accountant so they can work out how much can be claimed back once tax has been paid. However, if you cannot provide adequate records then that is obviously just going to be money wasted. If you are spending recklessly without keeping any proper evidence, you might also run into financial trouble later on. You should be able to find an easy guide to keeping track of expenses so make it a habit to sit down every day and write up any changes you might have.
Educate yourself about basic terminology
While you do not have to learn everything there is to know about business accountancy, educating yourself on some key terminology will stop you from getting too confused. For example, you should know about the differences between net and gross income as well as the difference between business and personal expenses. These are especially important if you are a sole trader and there might be some overlap between your expenses. Make sure that you understand everything and don’t be afraid to ask for help if you feel like you are struggling.
Ask for advice
The amount you are taxed by can be changed depending on how much you are spending. If you want to try to cut down on what you are paying for tax, you should have a look at your budget first. This is the first place which you will be able to make some changes which could impact your tax. Reach out to a financial advisor to see if they can help you to reorganise your spending.
Learning about your tax can be tedious but it is very necessary for any business owner. Don’t let yourself get caught out by how much tax you need to spend. Taking control of your tax process might be one of the healthiest decisions you make for your business.