4 tips to make small business taxes less stressful

Paperwork Stress

4 tips to make small business taxes less stressful

Before you set up your own firm, you have no idea how stressful small business accounting can be.

You go into it thinking that the government will provide you with easy-to-use, intuitive services to calculate what you owe… but nothing of the sort happens. Instead, online tools are clunky and complicated to use, and the rules for what you have to report change all the time, depending on the size of your business, the number of employees, and so on.

Fortunately, we’re here to help. In this post, we run through some quick tips on how to make your small business tax filing less stressful so that you can focus on your core activities.

1. Separate business and personal finances

Trying to figure out your business income and expenses is a nightmare when you run everything through your personal account. To make the calculation, you have to go through all your bank statements for the year with a fine-tooth comb, separating business expenses from personal ones.

Separating the two accounts, though, deals with this issue. Then, when the tax deadline arrives, it is easier to file.

2. Keep accurate records

Keeping accurate records of your expenses can feel quite abstract when you first start doing it. However, you soon see the utility when filing season comes along.

Being able to reconcile your receipts and invoices with the expenses on your account helps you prove your net income figure for the year.

3. Partner with small business accountants

In theory, you can file your own business taxes but in practice, no businesses do. Instead, they hire accountants to do the work for them.

As long as you have accurate records of your income, expenses and payroll, accountants can prepare everything for you, protecting you against possible fines for late filing.

4. Use tax reliefs

Lastly, setting up a small business can be expensive. The last thing you want is high taxes getting in the way of your profitability. Therefore, see whether you could benefit from any established tax reliefs.

For instance, if your company engages in qualifying R&D work, you may be able to earn tax credits. Likewise, if you currently pay Class 1 National Insurance, you might be able to save up to £3,000 per year from the government’s employment allowance. If you are unsure, check with your accountant.

If you’re looking for a small business accountant in the Manchester area get in touch.

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