Every company in the UK should strive to be as tax-efficient as possible. This is more important for small businesses with limited funds and resources. Finding the right legal ways to reduce your small business tax bill can help you increase your profits, enhance your cash flow, and solidify your overall business plan.
In this regard, getting in touch with a professional accountant is prudent. So, why not learn more about Quay Accountants or some other professional accounting firms in Manchester to help you in this regard?
But before that, make sure you understand the taxes you must pay for your small business so that the partnership tenure with your chosen accountant in the UK becomes more accessible and practical. However, you cannot just put anything and everything under the umbrella of a business website.
Top 3 Tips for Small Business Owners to Save on Taxes
When tax season arrives, the last thing you would like to feel is flustered.
Here are 3 tax-saving ideas to help you organise and monitor your small business accounts over the year.
1. Keep Personal Finance Away from Business Finance
First things first, form a separate bank account for your business. Even when it’s a small business, you must ensure that you can separate your personal finance from business finance after each month.
Having personal expenses recorded as business expenses is one of the most straightforward techniques to get into tax trouble. The better and more prominent your business and personal tax statements are, the less likely the IRS will find any fault with them.
2. Keep Your Records Up-to-date
Talking about clean data, having truthful information related to your accounts will make tax season much easier to navigate. Rectify earnings and cash outflows with bank records and invoices or payslips. Alternatively, you could use accounting software to do it for you. Or you can also get the help of a professional accountant to do the same on your behalf.
It is essential to report your business’s financial statements correctly. It doesn’t deliver a significant advantage, but it does make you understand what your company comparability is so that when you’re assessing at the end of the year to prepare for taxes, you will know that you will be looking at the correct information.
3. Get More Insights on Tax Deductibles
The lesser your revenues and profits, the less tax you’ll have to pay at the end of the year. Claiming business-related spending as an expense is one prudent way of reducing profit.
The petrol you had to pay for to get your business supplies, the travel tickets or hotel room booking expenses while on a business trip, should all be recorded as an expense towards your business. Everything that is a legitimate business deduction should be reported as a business expense to the company.
However, you cannot just put anything and everything under the umbrella of a business expense. For instance, having lunch with someone and stating the same as a marketing expense for the business will not suffice. It is, therefore, essential to be aware of what to pick and what not to pick under the category of tax deductibles.
Conclusion
Small business owners are really not generally where they are to be accountants or tax auditors. They have started the business to become entrepreneurs and to make money. They started the company to sell a product or a service they are passionate about. Hence, it’s not their expertise to be able to take care of the tax-related concerns of the business while also taking care of other business essentials.
Therefore, getting expert help is prudent. Being in the UK, you can quickly learn more about Quay Accountants or any other reliable accountant firm like them on the web. Such accounting firms have in-house chartered accountant experts who can help you reduce your tax bills in the best possible manner.