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< Back to Latest News Studies Article: Prepare Your Business for a Successful New Tax Year

Author: Matthew Jeffery, Tax Director

As another tax year draws to a close (on 5th April 2024) it’s an excellent time to put plans in place to get prepared for the next one. Being well prepared will help to ensure that your accounts are in order when it comes time to file again next April. 

This article offers some useful hints and tips to get yourself and the financial affairs of your business in order for the 24/25 tax year: 

1. Have an accounting process in place

Businesses are expected to record all financial transactions throughout the year, so ensuring you have a stringent accounting process in place is key for success. The start of a new tax year is a great time to review what was in place last year and make sensible changes to support you through the upcoming year. 

A good place to start is by looking at your bookkeeping practices. In the near future, HMRC expects all businesses to report digitally (Making Tax Digital – a Government initiative that aims to simplify the tax reporting process and increase its accuracy) so the start of the new tax year is a good time to consider a digitalised system such as Quickbooks or Xero.

In addition, assessing your bookkeeping provides your business with a good baseline to start from. By calculating your assets and liabilities you will have a clear idea of your financial position and the money owed to, or by, your business. By being aware of your current situation, you can form reliable financial expectations and make informed decisions. 

2. Know the deadlines and understand your tax rate and requirements

It’s important to be aware of your tax requirements and deadlines for the upcoming year. First, refresh yourself on which taxes you’ll need to pay. Sole traders likely need to pay income tax and national insurance (not applicable to holiday let owners). Meanwhile, limited companies pay corporation tax.  

The current self-employment rates for income tax:

Tax bandTaxable incomeTax rate
Personal AllowanceUp to £12,5700%
Basic rate£12,571 to £50,27020%
Higher rate£50,271 to £125,14040%
Additional rateOver £125,14045%

Here are a few essential dates to know: 

  • 6 April – 5 April – The UK tax year 
  • 5 October – Register for Self Assessment (if you haven’t filed in past years) 
  • 31 October – Paper return is due 
  • 31 January – Online return is due (If you file before 28 February, you can avoid a late penalty). Tax is also due on this date, but you may be able to avoid late penalties if you file before 1 April. 
  • 31 July – Second payment is due if you pay advance payments towards your bill. 

3. Forecast your finances and set aside budget

Having a realistic idea of the monies coming in and out of your business is key for estimating the tax obligations that your company will face at the end of the next tax year.

Regularly updating your forecasts and budgets will ensure that they remain current and in-line with any unexpected changes to the financial position of your business. Building these positive habits will save you time and effort when it comes time to file.  If you use a digital accounting software, it will do all this for you!

Putting money aside each month to pay your tax is good practice. This will ensure that you’re able to pay your tax bill when it’s due. Many businesses struggle to cover their tax liability and often do not have the available cash. To avoid this, we would recommend setting aside 15% to 20% of your profits each month. If you usually pay at the higher rate of tax, we would suggest doubling this to 30% to 40% of profits. 

4. Record and claim all recoverable expenses

Ensure that you know what expenses can be claimed by your business type and keep accurate records of them throughout the year. Leaving this until last minute is a mistake often made by small business owners. Dealing with expenses throughout the year means you will be more organised and not miss any tax deductible expenses. Again, using a digital accounting software will make this process simple. 

5. Review tax reliefs available 

Once you’ve got your new processes in place, you can start to plan for the new tax year. Step one is to review any available tax reliefs that are in place to reduce the tax burden on your business. There is a great deal of information available on the Gov.uk website and if you have an accountant engaged, they will be able to provide basic advice on the more well-known tax incentives and reliefs that may be applicable to your business. This can include legally reducing your tax bill, by donating to charitable causes or contributing to your pension fund.

Another option is to seek professional advice from a tax advisor. The world of tax relief is complex and subject to change and not even accountants can keep fully up to speed. By also engaging a tax advisor you can ensure that your business is aware of its obligations and at the same time, taking advantage of all available tax reliefs to ensure that your business is paying the correct amount and no more!

But whatever you do, don’t let the tax year pass without taking action. Most tax allowances work on a ‘use it or lose it’ basis. If you don’t make use of your tax allowances in this tax year, they can be lost forever. 

Uncover hidden tax relief with Zeal

Save yourself hours of research by having a 15 minute call with a tax expert at Zeal. 

Understanding the nuances of tax planning is our specialism. We will work alongside your business, and if you like, your accountant, to create a tax management plan that consider the context and individual circumstances of your business.

A call with us could help you plan ahead and guarantee compliance at the end of the next tax year.

Want to know more? 

Book a call today to see how our advisory services can enhance your financial situation.

For advice call 01633 287898 or email info@gozeal.co.uk