Four Tax Preparation Tips to Follow

Four Tax Preparation Tips to Follow

Do you know your tax return can be done anytime after the end of the tax year on 5 April? 

Follow these four simple steps to prepare your business and be able to plan ahead for January.

Tax season is one of the most stressful periods of the year for a business owner. With proper planning, however, you can change that. 

It’s essential to start preparing for the filing of your business tax return in advance so you have time to gather all relevant records.

Take a look at the following tax preparation tips that can make the upcoming tax season less stressful for both business owners and their accountants.

 

Organise Your Tax Paperwork

Before anything else, it may be a good idea to sort out any past years’ documents, if you haven’t already. Start organising your books to make sure that you’re prepared when the paperwork starts to come in.

Tax paperwork should be organised by category and you may want to make copies of important documents received by post.

 

Categorise Your Business Expenses

Another time-saving tip is to start organising and categorising your business expenses months before the tax return due date.

You can claim most of your business expenses as tax deductions. But if you’re not sure which expenses you can claim, check out the official guide on HMRC’s website or speak to an accountant.

All business expenses must be sorted out and explained in detail. Finally, don’t forget to itemise your expenses.

Alternatively, if you outsource your tax preparation, you will want to hold on to all your documents for when it’s time for your accountant or accounting firm to prepare the tax return.

 

Check Whether You Can Get Deductions and Credits

Small businesses may qualify for a number of tax credits. However, don’t wait till the last minute. Check in advance whether you’re qualified for these credits.

Deductions reduce your taxable income and credits are even better, as they directly reduce the amount of tax owed. Your accountant or tax preparation software will have a list of tax deductions that apply to your business.

 

Get Help

Tax return preparation isn’t easy and for most people, it isn’t enjoyable.  If your affairs are straight forward you may want to prepare your own return, especially if money is tight.  However, this can be costly if you don’t get it right whether it is by not claiming allowances or reliefs you are entitled to, or by making a mistake in the return.

Consider whether you should consult an accountant over the reliefs you can claim.  If you do prepare your own return, do so as early as possible so you have time to consult an expert if needed.  If you wait until January to engage an accountant, you’ll likely pay more and you’ll definitely be more stressed.

 

Advance Prep Wins Out

For most business owners, tax season is far from the favourite time of the year. However, it’s not an excuse for you to wait until the last moment to start preparing your tax return.

To avoid unnecessary stress, the best course of action is to prepare in advance. 

It won’t trouble you nearly as much if you’re to find that something is missing, but that’s only possible if you leave enough time to sort things out.

If you’d like to discuss how we can help you, contact us at This email address is being protected from spambots. You need JavaScript enabled to view it.

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