When you’re running your own business, the end of the tax year can be a great time for a spring clean and a time to create order out of chaos!  The tax year ends on 5 April 2016, so most sole traders will be preparing their accounts to this date.  For owners of limited companies, even if the company year end is different, you will be including the amount of salary and dividend paid to you in the tax year (6 April 15 – 5 April 16) on your self-assessment tax return.

 

So what should you be doing before the end of the tax year?

 

  1. Get you Bookkeeping in Order

I know –not very exciting – but so important. Make sure you have copies of all your invoices and receipts, bank statements, and your spreadsheets are up to date.  A good filing system will not only make your life easier but also put a smile on your accountant’s face!

Make sure you have a record of any business mileage you have done, and have details of any other items relating to the business that you may have paid in cash or from your personal account (eg mobile phone, parking)

 

  1. Asset purchase

If you are considering buying capital items for your business (computers, furniture etc) then if you purchase them before the end of the tax year and your accounting year end, then you will get the full tax relief for them in the year.

 

  1. Personal tax

Don’t forget tax efficiency in your personal life.  Have you used your ISA allowance (or even part of it), considered pension contributions or made any Gift Aid donations – keep a note of all these as they could save you tax.

Make a plan to be organised for the new tax year – speak to a financial advisor about your own personal situation and resolve to get those things done you may have been putting off.  Have you made a will, got insurance for if you can’t work or worse?  Resolve to sort these out in the new tax year if you haven’t already.

 

  1. Use your Allowances

Have you made use of you own and your family’s personal allowances?  Check to see if you can structure your assets and income in a way so that you are able to fully utilise your allowances.

 

  1. Dividends

If you have a limited company consider bringing forward paying dividends.  Dividends that fall into the higher rate tax bracket are taxed at 25% before 5 April 16 and 32.5%.  Everyone will have a £5,000 dividend tax allowance from 6 April 16 so plan if possible to ensure it is fully utilised across the family.

 

A few simple steps can help you get your house in order before the year end and good tax planning can save you tax.  If you would like any more advice then please contact Rosie Forsyth at Wilkins & Co.