Set up a separate tax savings account
One of the simplest ways to prevent having a heart attack when you see your tax bill is to save for it all year long. Set up a separate savings account that you can’t touch and put a set amount in each month.
You have to make sure you are putting the right amount away. One way could be to transfer 15-20% of the income you make from each client/customer, however this depends on the unique circumstances of every individual running the business and the structure of the business. Your accountant can help you decide what this amount should be based on his or her knowledge of your business and your overall financial affairs.
If you are not sure contact us here and we can talk you through it.
The important thing is that you are saving for your tax bill before you get it, then you have a no nasty surprises.
Keep track of all your expenses
Every receipt you get could reduce your tax bill! Keep track of them or you are literally throwing money in the bin.
There are many app’s that can help with this tracking and save you time. You can upload your receipts by sending photos or documents on your phone to an app and they are stored there.
We are a big fan of this as it keeps our clients on track! Want to know more? Email email@example.com and mention Receipt Bank app and we’ll come back to you.
Also have a talk with your accountant about what’s deductible and not. You don’t want to miss out on anything and more importantly you don’t want to pay more tax than you should!
Always keep track of your expenses and this will help to reduce that bill tax bill.
Look at your business structure; Are you a sole trader who should be a limited company?
Your business structure can affect your taxes. Whether you are a Sole Proprietor, in a Partnership, a Limited Company or anything in between this can affect your tax liability. Talk to your accountant about your business structure, is there a way to restructure to ensure you pay less tax? Your accountant will know!
These are only 3 ways you can avoid a scary tax bill, the big thing to remember is you have to keep on top of your accounts. To some people this can seem daunting, if this is you give us a call. We can ensure next year’s tax bill doesn’t come as a surprise! Click here for a complementary consultation with one of the team!
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