Tips to avoid financial stress at Year End
The end of the financial year can be a stressful time for both sole traders and contractors operating through limited companies.
Based on our experience of over two decades, here are a few simple tips that can help you avoid financial stress at year end:
1.) Keeping clean records
Whether you are a sole trader or a director of your limited company, you need to keep adequate records to prepare your accounts at year end.
Adequate records ensure that you are capturing the activity of the business throughout the year rather than scratching your head at year end as to where you have spent your money. Using an accounting software like Xero or Quickbooks is an effective way of capturing expenses as you incur them. For every £1000 of expenses you capture you are saving at least £190 in tax.
2.) Keeping track of filing deadlines
Know your filing deadlines! For sole traders this is the self-assessment deadline of 31 January each year. Don’t leave things until the last minute. Planning when to do your self-assessment return and saving money to pay the tax at the end of January can reduce the stress most people feel when it comes to their accounts and tax returns.
If you are operating as a limited company then your deadline is 9 months after the year end to file your company accounts. The deadline for your corporation tax return is 9 months and 1 day after your company’s year end. Again like sole traders if you do your accounts soon after the year end then not only have you got them out of the way but you will also know what your tax liability is and you can therefore save up accordingly.
If you need further advice, or help with your bookkeeping, please contact us for a free consultation.