As the tax year end approaches
(3 weeks to go!) you should start planning ahead. The time act is now, the clock is ticking. When the 5th of April arrives it will be too late. Here are 5 tips to get you going on that journey.
Individuals
1. Use your ISA allowance if you can
2. Consider topping up your pension (especially important if you risk losing your child benefit)
Sole traders & Companies
3. Review business expenditure and planned purchases. The higher your expenses, the lower your profit and the less tax you pay. So bring forward any purchases. In essence it will mean you pay the tax on that amount 1 whole year later
4. Review salaries and bonuses - consider paying your partner for any legitimate work that has been done throughout the year.
Companies
5. Your bank balance as at your year end date will become public record forever. So plan cashflow carefully approaching your year end. Your bank (cash and cash equivalents) will be reflected in your accounts submitted to Companies House and be available for all to see.
BONUS TIP: When you sit down to plan ahead for business growth a useful figure to keep in mind is that a growing business should be investing 1.25-2.5% of their revenue in their finance function (this includes everything from bookkeeping, to a FD (where relevant) and accounting fees etc)
Note: A limited company can have any year end they choose, but many choose to align with the tax year end so a lot of company directors will need to start preparing for both their personal and company year end at the same time.
“Planning is bringing the future into the present so that you can do something about it now”