Taxes and business is not a straightforward combination. More often than not, it’s a source of stress and headaches for many, and the amount of hoops you have to jump through can grow tedious. While business owners have more working freedom than most, they pay for that privilege with difficult to manage finances.
But, like any walk of life, there are ways to make it easier. Businesses are often given a lot of help by the government and various agencies, due to the unpredictable nature of owning a company. In this article we’ll run through some of the best tips and advice for business owners of any size, and what to do about your tax.
Is It Possible For You To Work From Home?
Sure, you may choose to operate out of a huge office complex, but could scaling back and cutting costs be the solution you need? Absolutely. Those that run their businesses from home are entitled to numerous tax write-offs when they submit their annual tax return.
There are numerous ways to do this. Many just play it safe and claim a standard few pounds each week, but you can claim more. If you work over 101 hours a month from home, you will be entitled to a neat monthly sum that can save you hundreds of pounds a year.
Of course, it may not always be possible to work from home, and that’s understandable. Even if you work from an office, you can still claim a portion of deductible fees from the running of that office. This includes utility bills, telephone bills, equipment costs etc. Keep your receipts, even if you don’t know you can claim it back. It may turn out that you can.
Organise Your Accounts (Or Pay Someone To Do It)
Business owners will have income and expenses flying left, right and centre, and it’s up to you to organise them. Not being able to produce proof of income to the correct authorities can result in costly tax penalties. Even a simple Excel spreadsheet is a good place to start.
Of course, if you aren’t confident with this kind of thing (or don’t have the time) you aren’t out of options. An accountant can handle all of this for you, and may be able to save you a bit more tax money than you could alone. A common reason for the government issuing tax penalties is failure to keep records, so don’t make this mistake.
Are You Frequently Discussing Your Situation With The Correct People?
If you’re running a business, you won’t have time for everything. This includes tax and all the little details that come with it. The fact of the matter is if you regard your tax attorney as a trusted advisor you’ll end up paying as little tax as possible. Find someone you can work with and explain your situation to them. There is no shortage of options.
Independent Contractors vs. Employees
This is especially important if you’re just starting out in the business world. You may want to put a good team together, but lack the money or resources to do so. If you hire contractors or freelancers, you won’t have to pay payroll tax like you would for employees. See if there is any work you can outsource to a freelancer to save you a bit of cash.
If you’re looking for more business tips, you’re in the right place! Take a look at our guide to getting a fully organised business.