Are you prepared for HMRC self assessment payment?

Accountants help make sense of your finances and prepare your accounts and tax returns for your HMRC self assessment payment. You’ll want to ensure you are paying the right amount of tax, have an idea of the size of your bill and when you need to pay it, as early as possible.​​

If you’re concerned about fees for accounting services, here are two tips:​​

Do not underestimate the difference to your overall tax position that an accountant can deliver!​​

Go through your debtors (people who owe you money). If you’re sure they are a bad debt and will never pay you, write them off now.​ You don’t want to pay tax on income you’re unlikely to receive.​​

Is your mileage logbook up to date? Without this you won’t be able to claim a deduction for business travel. Take a look at our article which provides more detail on claiming for motor vehicle expenses.​

Make sure that you are carefully recording all your creditors (people the business owes money to).​ Recording all liabilities accurately can reduce your HMRC self assessment payment.​

Ensure you have a record of all the donations to charity you have made during the tax year, and also all pension contributions. ​

In the lead up to the end of the tax year (5 April) it might be worth speaking to a financial adviser to see if it’s worth making any additional contributions to your pension. ​

Think seriously about using a bookkeeper. If you’re not confident about what goes where, or are as time-poor as most business people, then a bookkeeper can help input information into your system correctly. You may be surprised how little it can cost – what takes you four hours may take a bookkeeper only two. It will certainly free up your time to do something more enjoyable. Do some research online or ask your colleagues/mates – there is no shortage of good people out there.​​

Beany offers this service at £50 plus VAT per hour.​​

Using an accounting software package that does what you need is vital to businesses. If you haven’t updated for a while, or are new to business, you’ll be astonished at what’s available these days. The start of a new financial year is the perfect time to switch to Xero (or other accounting software). Almost all of our clients use Xero. Select a Xero pricing plan that works best for you (you can easily upgrade or downgrade later if needed).​​

The Xero Cashbook or Xero Ledger (available only through accountants) may be perfect if you don’t need all the bells and whistles.​​

Do you need all those entities and tax structures? Maybe you need two companies and three trusts – maybe you don’t.​​

Although there are short–term costs to close these down, it is well worth it to stop ongoing compliance costs.​​

New or upgraded business software seems to be available every day – is there anything you can automate to save time and money? Can your apps be integrated into your accounting system, or with each other?​​

Colleagues and friends may provide useful nuggets of information.​​

Business can get complicated and when it does, accounting records and systems often follow suit.​​

Avoid burdening yourself with multiple companies, trusts, and structures. They are rarely worth the hassle.​

Only use multiple codes for different items if the different codes genuinely help you run your business. Sometimes more information leads to poorer decision-making or less business agility.​

Set up a system for recording your business income and expenses directly, in one place.  Some businesses keep paper invoices, which they then enter into a spreadsheet, which then gets sent to an accountant, who inputs it into their accounting software. If this works for you and your accountant, that’s fine, but there are more efficient ways of doing this.​

If you’re adding complexity – which will, inevitably, add cost – then make sure you’re getting a good return. Sometimes it’s worth it, sometimes it’s not.​​

Digitise all important paper documents and save them, along with your relevant electronic documents, in an orderly way. Key documents to save include:​​

Ideally, you’d save them to your accounting system (e.g., Xero), but there are alternative solutions, such as Google Drive. Whatever you choose, aim for a product that is easy to use and secure, yet shareable.​ ​

It’s also helpful if you add detailed descriptions on the transactions – your accountant will appreciate it!​

If you want to know more on this topic, we have a blog on Making Tax Digital.​

We’re an online accounting firm that is always right here for you, your accounting pain relief. The most advanced technology lets us work way more closely with you than a normal accountant would.​

We have a dedicated team of remote accountants to take care of your business no matter where you are, so you can focus on growing your business. We take out the ‘fluff’, break down the barriers and get things done. Looking out for you is what we are all about. Get started for free today.​