If you’re a business owner, then you know that there are so many things to keep track of. You’ve got responsibilities for your staff, your business, and your customers.
But, at the same time, you must worry about making sure that everything from your company tax return to the end-of-year accounts is done correctly.
This is very important—and something you can’t afford to mess up. You need to know two main things when it comes to this type of work: firstly, it’s very different from any other type of work you’ve done in the past; and secondly, it must be done right. If it isn’t, then you could find yourself in a bit of trouble with HMRC and the government authorities.
Business Records and Balance sheet
Yikes! With taxes becoming more complex every year, it’s essential to check that you’re meeting your obligations.
In the UK, there are three primary financial statements that all limited companies are legally required to file each year: the balance sheet, the income statement, and the cash flow statement (the first two being known as ‘statutory accounts’). You’ll also need to keep a record of your inventory, fixed assets (such as property) and liabilities.
Your accountant will use these records to fill out a corporation tax return; if any of them is inaccurate, you could be subject to penalties. And regardless of how much work you put into preparing your limited company accounts, HMRC is free to go over them with a fine-toothed comb. They might not find what they’re looking for—but they could catch something unexpected.
Double Check Tax Rates and Payments Are Correct
If you’re one of the many entrepreneurs who oversee your company’s accounts and submitting own business corporation tax return, you probably know how stressful it can be.
One little slip-up and it can be bad; luckily, you can easily avoid this by being organized. That way, when you sit down to go over your transactions and prepare your tax return, everything will already be in order—and if there are any mistakes, you have time to fix them before penalties are added. This is an excellent time-saving tactic that will allow you to get through all of your transactions with ease.
Update Cash Flow Forecasts to Actuals
You’ve nailed your limited company accounts and have a cash flow forecast to reflect what you’ve earned, spent, and are owed. Finally, you’re ready to reconcile your actual company account balances with the forecasted numbers.
It can be so easy to miss that your expenses are a little high or that you owe some of your suppliers. This is another step that many persons don’t take real-time visibility into their company finances, making it very difficult to know if they need to do anything about any differences. We recommend going through all your income sources (e.g., invoices) and expenses (e.g., purchases). Then, run reports on outstanding liabilities—are there any amounts due? If so, how much? Double-check that everything adds up!
Calculate Capital Gains and Losses
Figuring out your net income for the year can be a tough job. It’s even more challenging when you have to consider capital gains, which is the market value of an asset minus its original purchase price.
When you buy something for your business—whether it’s a chair or a computer or something else—you want to know how much you can depreciate that cost over the next few years. Many people use depreciation to offset their income but calculating capital gains can be tricky sometimes.
The best way to calculate capital gains is by subtracting your initial purchase price from an asset’s current market value, but this means knowing what your original purchase price was in the first place. In most cases, that actual price will be the amount you paid when you bought it brand new, but sometimes there are hidden costs that come with purchasing it. For example, you might have had to pay for installation or training from vendors, or maybe you had to pay extra for things like sales tax or shipping and handling.
Choose your accountant
Any business needs to ensure that they keep their accounts in the correct order. Running a limited company means additional accounting requirements, and it is crucial to hire an accountant who can help with this.
With so many accountants to choose from, you may find it challenging to determine which one you should use for your business. We would recommend going with Tax Accountant | Specialist tax Consultancy, as they have been around for many years and offer excellent service at a reasonable price. They have a team of qualified accountants and Tax Advisers who can help you with all aspects of accounting, including bookkeeping, VAT returns, payroll and much more.