The start of a new tax year can be a daunting time for tradespeople, especially those who run their own businesses. With so much to do to ensure that you are ready to face the year ahead, Fergus is helping the trade with some valuable hints and tips.
“With the right preparation and planning, you can make the most of the opportunities that the new tax year presents and get your trade business in shape,” says James Chillman, UK Country Manager. “Don’t forget you can automate a lot of the hard work with job management software like Fergus, especially when it’s seamlessly integrated with accounting software like Xero.”
Chase any outstanding invoices
One of the most important tasks you should complete before the end of the tax year is to chase any outstanding invoices. This is essential for two reasons; firstly, you need to ensure that you receive all the money you are owed before the end of the tax year so that you can report it on your tax return, secondly, chasing overdue invoices can help to improve your cash flow and ensure that you have enough money to cover your expenses.
Compile your expenses
Another important task you should complete before the end of the tax year is to compile your expenses. As a tradesperson, you are likely to have a range of expenses that you can claim against your tax bill, such as tools, materials, and travel costs. However, to claim these expenses, you need to have proof of purchase. Therefore, you should gather all your receipts, bank statements, and vehicle logs, and ensure that you have all the documentation you need to make your claims.
Conduct a stocktake and make any final purchases
If you carry stock or materials, you should have conducted a stocktake before the end of the tax year. This will help you to identify any discrepancies and ensure that you have a clear picture of what you have in stock. Once you have completed your stocktake, you should make any final purchases. This will help you to reduce your taxable profit and ensure that you have everything you need for the year ahead.
Gather and organise your financial records
It’s essential to keep accurate financial records for your trade business. Not only will this help you to manage your cash flow and make informed business decisions, but it will also make it easier for you to complete your tax return. You should therefore gather and organise all your financial records, including bank statements, receipts, and invoices.
Check your eligibility for tax relief measures
There are several tax relief measures available to tradespeople that can help to reduce their tax bill. For example, you may be able to claim capital allowances on any equipment or machinery you purchase for your business. You may also be eligible for tax relief if you use your home as an office. Therefore, before the end of the tax year, you should check your eligibility for any tax relief measures and ensure that you have all the necessary documentation to make your claims.
Finalise your payroll
If you have employees, you should ensure that your payroll is up to date before the end of the tax year. This means making any final payments, ensuring that all your employee records are up to date, and completing your end-of-year returns. You should also ensure that you have all the necessary documentation to complete your P11D forms for any employees who receive benefits.