Make 2015/16 a happy new tax year
May we at AIT be one of the first to wish you a happy new tax year.
Whilst the start of the new financial year goes in far less noticed than Jan 1st it can be more significant for some.
Now UK companies will pay a lower rate of corporation tax on their profits, now 20%. Employers hiring under 21s will also no longer face National Insurance Contributions tax bills.
We hope your business is well-prepared for this new tax year. All types of business can take steps to prepare for changes in a new tax year.
- Get the paperwork in order
These days you still need to have all your paperwork in check to satisfy the tax authorities and make it a new year’s resolution to stay on top of it. Check your systems provide all the information you want to run the business. EG, your trade debtor schedules should be produced in a way that you can chase delinquent customers. Ask whether the information helps you to achieve your business objectives.
- Notify the tax man
If you are self-employed you must register for self-assessment, while a limited company must register for Corporation Tax. If you have taken on new staff you will need to register for PAYE and you might want to voluntarily register for VAT.
- Test your tax liabilities
Check the forecast tax liability for the current year and ask yourself what the likely liability is for next year. Speak to your accountant about whether you are making full use of all the available losses and capital allowances on equipment.
- Look to the future
Review your budgets and ask whether they are still realistic or are there different trading conditions which call for a revised forecast.
- If your business is new, you may start as a sole trader
In some circumstances it can be easier to start trading initially as a sole trader as opposed to limited company. It’s a good option when you’re getting used to running a business and does not incur as much admin. Expenses incurred before trade commenced can be deducted from your first years profits. In order to do this, you will need records and receipts. A lot of different things can be claimed as expenses including the likes of insurance, research and development, mileage and even the cost of raising finance.
- Always plan ahead
Make sure you have well-prepared business plan as it can instil confidence in your stakeholders and reassure customers, suppliers, banks or investors that your business will flourish. A good business plan includes details of the key people involved, market research and financial forecasts You should update the plan regularly as it will help you spot potential problems to be fixed.
- Choose a qualified accountant
A good accountant can help with technical matters and also provide useful advice on business decisions and raising finance. There are several things to look for when choosing an accountant:
– Consider experience and reputation
– They should be members of a recognised accountancy body
– The firm you choose should also have professional indemnity insurance
Your relationship with your accountant should be a long-term one, so take your time and do your research.
We hope you found our tips useful and they will ensure a prosperous 2015/16.