At this very minute there are small business owners the length and breadth of the land looking for receipts, bills and working out business trips taken a year ago, all in the name of saving money on your tax bill.
This time of year is tax return time and we can guarantee you that there’s a lot of stress in these businesses and they are thinking there must be a better way.
Well there is, but it requires a little bit of organisation. Follow these simple tips and you’ll save yourself a big job in the future.
Firstly keep all receipts – arguing with the taxman is a lot less hassle than showing the receipt for that £15 car parking charge in London. It is also an idea to mark on the receipts the business purpose.
This is especially good for business lunches – as it can be hard to justify otherwise why you were in the Red Lion on a wet Wednesday in November.
In the age of the smartphone taking a pic of the receipt can be an idea as well. There are a whole host of apps on iphone and android to help you.
Keep a daily diary note as well as using outlook or Google calendar. It’s valuable back-up and takes half a minute.
For instance, with business mileage maybe there was a diversion off the M6 that added 20 miles onto your journey. Maybe there was that appointment that was cancelled in Luton whilst you were just outside Newport Pagnall services.
We would also advise not to rely just on credit card statements and debit card/credit card receipts. These are important, but keep the actual receipt with you.
The taxman may see you spent £342 at Staples but it won’t know what you bought. It could be movies or a whizzo sound system. These receipts are critical if you get audited.
Finally the last thing we’d advise is stay away from cash. It is hellish for bookkeeping and auditing.
We hope this has given you a blueprint to make the next tax return less painful. Follow our advice and a big job can become a small job and you can start spending time actually running your business rather than rummaging through draws and phoning after receipts.
There’s the old saying a stitch in time saves nine. This certainly applies here and unquestionably you’ll save money, time and stress.
Good look with your return.