Make tax less of a burden
July 2008
Working out your business's tax obligations and filing your returns on time is essential, both to minimise your tax liability and to avoid any penalties. Early and effective planning can make organising your tax payments less of a burden.
According to research 20% of UK small business owners did not get their tax return in on time for this year's 31st January self assessment deadline, a 14% rise on last year. As a result, penalty charges issued by HM Revenue & Customs (HMRC) to businesses that missed this year's deadline could top £200 million.
To avoid late payment penalties and minimise your firm's tax bill, tax planning should be a year-round responsibility. Make sure all records and receipts are up to date and well organised, so that when it comes to filing your tax returns you can complete them in the minimum time and with minimal administration.
It is essential that businesses are aware of the various tax submission deadlines at the start of the tax year on 6 April. By knowing when the deadlines are, you can also take advantage of any filing incentives on offer.
You also need to plan your tax affairs so you set aside sufficient funds for your tax liability. If you don't know what your liability is likely to be, you may end up with a bigger tax bill than you expected, and this unanticipated expense could hit your cash flow hard.
For more information visit the HRMC website at www.hmrc.gov.uk.