Tax tips for small business owners
Contributed by: Berley

Tax tipsThere are many things that you need to take care of when you start a business including marketing, hiring employees, monitoring inventory and business planning. With all of this on your plate, it can become overwhelming without help from one of our small business accountants at Berley. In fact, startup owners often forget about one of the most vital things: business taxes.

With that in mind, here are some helpful tax tips to help you stay on top of your taxes.

Plan ahead

Engage in some tax planning now and then. It can benefit the cash flow of your business and ensure that your tax bill is as small as possible. It’s essential for you to be aware of your tax responsibilities and plan accordingly. Planning ahead will help you stay on top of tax deadlines.

Furthermore, analysing your expenses will enable you to learn more about your overall finances, which means that you can make informed decisions about the future of your business.

Keep an eye on the law


Tax laws change yearly and are updated frequently with newer legislation. It’s important to be aware of any upcoming changes and how they will affect you because it can be easy to get caught unaware. Changes such as the Making Tax Digital scheme requires businesses and organisations to keep digital accounting records and to use compatible software to submit their tax returns. If you’re on the wrong side of the law, the judge will not accept any excuses for noncompliance. Significant law changes will always be announced very far in advance, so it’s up to you to find the information and make yourself ready. Consider hiring a specialist tax accountant from Berley to help keep you on top of things.

Keep your tax records organised


As mentioned with Making Tax Digital, new legislation means that business will need to record their taxes and manage their business accounts digitally. Cloud accounting software like Xero can do most of the work for you, as well as provide real-time information about what you’re paying and to whom. Bear in mind that you’ll need to keep tax records for at least six years by law, so keeping things neatly filed is of the utmost importance unless you enjoy wading through years of reports to find what you need. Remember, messy folders make for missed deadlines.

Know your tax deductions

As a business owner, there are various running costs associated with keeping everything together. Some of these costs can be deducted from your overall profit as allowable expenses, meaning you do not pay tax on them. There are many different expenses you can claim, but some of the major ones include:

  • Travel costs – This applies to most charges incurred from a vehicle used to for business, from fuel to insurance.
  • Business premises costs – This covers the costs of running your business premises, such as heating, electricity, and equipment used for less than two years. If you work from home, you may be able to apply this to your own gas and electricity bills, provided you can prove your work office uses it.
  • Staff expenses – This includes any payments made to either the staff or subcontractors you use, as well as Employer’s National Insurance.

Consider a Carryforward

If your company makes a loss, don’t think of it as the end of the world. In actuality, it can be used to your advantage. For instance, if you made a loss last year, but this year you are much more successful, you’ll have to pay much more tax. To counteract this, use an advanced accounting technique called a “Loss Carryforward”. A Loss Carryforward allows you to apply the previous year’s losses to the current year’s gains. This was designed to allow businesses to offset losses with future profits in order to pay the correct amount of tax in the years following the loss. Doing so can significantly reduce the amount of tax you pay if your business has recently been through a rough patch or economic downturn. Seek the help of a specialist small business accountant before attempting this, and our small business tax experts at Berley can advise you on how to go about it.

Get help from Berley


Berley is an expert in assisting SMEs with their tax needs. We recognise that all businesses are different, and we aim to offer a tailored service that is perfect for you and the business you run. We can help you with a range of responsibilities from filing tax returns and resolving audits, to tax planning and sorting out tax issues if and when they occur.

Dealing with taxes can be challenging and stressful, which is why we offer a comprehensive service that does all the hard work for you so you can focus on the other aspects of running a business.

To get in touch with one of our tax experts and to find out how we can make your taxes easier to manage, contact Berley today on 020 7788 8261, or fill out our Online Form.

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