Running a small business can offer you freedom and control over your finances. However, the downside is that you’ll need to pay your taxes each year by filling out a Self Assessment tax return to HMRC. You can receive a penalty of £100 if your Self Assessment is up to 3 months late, so it’s essential to plan your finances. Here are some top tips for managing your tax returns.
Get organised ahead of time
Completing a Self Assessment form is much easier when you have the records already in place. Consider using accounting software or a bookkeeping system to keep track of your finances throughout the year. Ask a professional accountant or do your research on which income tax bracket you fall under and the expenses you can claim back.
Manage your cash flow
If you’re looking at the amount of tax you need to pay and it seems quite daunting, there are some alternative options. Some companies offer tax debt relief through a short term loan. While they might seem tempting as an easy solution, their high-interest rates can cause damage to your business in the long term.
Why not lease your assets and equipment to Tower Leasing? This method will allow you to increase your business’s profitability without the financial risk of a loan.
Ask for help
For a small business owner, organising tax returns may be too much to handle on top of day-to-day operations. Remember that it’s okay to ask for help from an accountant or HMRC. They can help indicate any reliefs you’re entitled to and get you organised in good time.
HMRC is currently offering a deferral of Self Assessment forms between 31 July 2020 and 31 January 2021 due to the disruption caused by COVID-19. You do not need to inform HMRC that you are planning to defer. However, you must make your second payment before the end of January 2021.
Managing your tax returns – where to find out more
For more business advice or to find out more about our alternative financing solutions, get in touch with our expert team at Tower Leasing today.