As the tax year draws to a close, it’s the perfect time to get your business accounts in order. Whether you’re a sole trader, self-employed, or running a small business, preparing early can save you stress, money, and time.
Here’s your end-of-tax-year checklist to make sure you’re on top of everything.
1. Organise Your Paperwork
First things first—make sure all your paperwork is in order. This includes:
- Invoices: Ensure you’ve issued invoices for all completed work and that they match your income records.
- Receipts and Expenses: Gather all receipts, bills, and proof of expenses. If you’ve been snapping photos of receipts, make sure they’re all logged.
- Bank Statements: Download statements from your business account to check against your accounts.
Top Tip: Digital tools can help you store and organise documents, making it easier to find what you need when it’s time to file your return.
2. Chase Up Unpaid Invoices
Unpaid invoices can make a big difference to your year-end finances. If any invoices are still outstanding:
- Send Reminders: A polite nudge can help speed up payments.
- Offer Flexible Payment Options: Making it easy to pay by card, bank transfer, or digital apps can reduce delays.
- Consider Partial Payments: If a client is struggling, a payment plan might help recover at least some of the owed money.
Why It Matters: Having a clear picture of your income helps ensure your tax return is accurate—and it boosts cash flow too!
3. Review Your Expenses
Claiming all eligible expenses can reduce your taxable income, which means a smaller tax bill. Common expenses include:
- Travel costs, including mileage
- Tools, equipment, and materials
- Uniforms or workwear
- Office expenses, including stationery and software
- Marketing costs
Pro Tip: Check that all your expenses are genuine business costs. If you’re unsure, it’s better to double-check than risk claiming something you shouldn’t.
4. Reconcile Your Accounts
Take the time to compare your records with your bank statements. Make sure:
- All transactions are logged: No missing income or expenses.
- Your accounts balance: Everything in your books should match your bank statements.
- You’ve accounted for VAT: If you’re VAT registered, make sure it’s correctly recorded.
Avoid Mistakes: Check for duplicate entries or anything that doesn’t look right. The end of the tax year is the perfect time to tidy things up.
5. Calculate Your Tax Liability
It’s important to know how much tax you’ll owe and make sure you’ve set enough aside. This includes:
- Income Tax and National Insurance: For sole traders and self-employed individuals.
- Corporation Tax: If you run a limited company.
- VAT Payments: If applicable to your business.
If you’ve been putting money aside each month, this step should be straightforward. If not, now’s the time to plan how you’ll cover the bill.
6. Check Your Allowances and Reliefs
Make sure you’re making the most of tax allowances, such as:
- Personal Allowance: The first £12,570 of income is tax-free (for most people).
- Annual Investment Allowance: Claim up to £1 million on qualifying business equipment.
- Mileage and Travel Expenses: Especially important for tradespeople and those on the move.
These allowances can significantly reduce your tax bill, so don’t miss out.
7. Plan Ahead for Next Year
The end of the tax year is also a good time to set new financial goals:
- Budgeting: Create a plan for managing cash flow, expenses, and savings.
- Saving for Tax: Make setting aside tax money a regular habit—ideally, every month.
- Review Your Accounting System: If managing your accounts was a struggle this year, it might be time to consider getting professional help or switching to an easier system.
Need a Hand Getting Your Accounts in Order?
At Buzz Accounting, we know that managing your accounts can feel like a lot—especially at the end of the tax year. We’re here to make the process simple, help you avoid costly mistakes, and keep your finances on track all year round.
If you’re ready to make your accounting a doddle, drop us a message or get in touch today. Let’s make this tax year the smoothest one yet!