‘‘There are only two certainties in life – death and taxes!’ Although it is difficult to stop the sand flowing though the hour-glass of life, good habits can slow its pace. Good taxation planning can ensure that taxes can be managed so there are no nasty surprises resulting in urgent phone calls to the bank manager a few days before due date or suffering unpleasant HMRC penalties.
What processes should business owners adopt to plan their regular tax commitments?
- Prepare annual budgets, forecasts and a tax plan.
Prior to the start of each year, prepare budgets and forecasts to map the business’ financial performance over the next twelve months. The operational budget will project the taxable profit from which the business’ tax liability can be calculated and inserted in the cash flow forecast for the ensuing year.
- Use a suitable accounting software.
Capture ongoing trading with regular reports produced to indicate the company’s profitability, cash flow and performance. Don’t just run the monthly reports and file them, analyse them to ensure the business is performing in all facets and compare actual results to budget. Talk to us about your accounting system as we can help you with all popular accounting software, cloud or traditional.
- Update your tax plan.
Businesses are dynamic. So too are the economy and the world of business. World, national and local events can significantly change business profits, so the tax plan must evolve with the business’ financial performance. Re-evaluate the tax plan at least three times a year to either increase or decrease your tax savings to ensure you have sufficient cash tucked away to pay your tax.
- Seek advice.
We can help you with your budgets, forecasts and tax plans or prepare them for you. If you are considering a new business initiative come and talk to us so we can ensure you are using the right structure and allowing for the diverse range of taxes you will be encumbered with. Remember, taxes can be legally minimised and it’s our job to assist you to do so!
If you need help with your tax just let us know call 0800 0217100 or email us on firstname.lastname@example.org . Tax is way too complex to tackle on your own!