January 27, 2021
Accounting for Start-ups can be difficult if they do not take care of certain things. Below are the Tips for The Self-Employed Business Owners.
You need to keep an eye on the deadlines. It may seem easy to remember all the dates. However, it is better to write them down and set reminders. Different dates for VAT, SA and YE may confuse you. The written work can assure you that you are not making a mistake and the reminder will ensure you submit the same on time. You get one month and 7 days for VAT. For self-assessment we have a fix date of October 31st for paper return and January 31st for online return. If you miss this deadline by even a day, you will incur a penalty of £100 (up to 3 months). Obviously, you do not want that. It is better to plan and do the needful at the earliest to avoid such consequences as due to unforeseen circumstances it may skip out of your mind. However, while you may prefer to submit the return early, you may want to hold the payment till as long as possible for liquidity purpose. This may mean you would skip the deadline for payment which is same for VAT but January 31st for SA (both paper and online). You can set up a DD to avoid this which will give you extra 3 days for payment of VAT.
Set aside the amount
If you could not pay the tax due on time you will incur the extra expense of penalty. Even if you have set up DD you need to ensure the bank account you have registered has the amount due. It is better to set aside some amount (the amount you expect as tax) that will save you from such situation even as the festive month passes.
If you are fulfilling your responsibilities yourself without any help from an accountant, it becomes very important to be updated with the changes. Even otherwise it is always helpful to stay updated.
If you do not know what new schemes are available to assist the small businesses in the pandemic, how will you utilise it? In order to charge correct VAT, you need to know the latest rates. If you have a hotel and you charged 20% instead of 5% during the given time, you will look like a fool and make your customers unhappy.
In business you need to be alert and save every single penny you can by being smart. You can ask your accountant for the guidance or increase your reading. You must update yourself on tax-free allowances. You can consider working from home and claim a percentage of your expenses like council tax, electricity or gas expense.
Keeping all your records meticulously will help you a lot. You cannot only ensure you reclaim all you can, but also find yourself at ease in case of an inspection. It is compulsory to keep the records for five years. You can hire a bookkeeper or do it yourself, but you must maintain all your records accurately to save time and also money. Your records will give you a perfect picture of your business and help you take important decisions.
You may find it difficult to carry out these simple tasks. Moreover, you need to be updated with everyday changes. If you have an accountant who can help you with these tasks, you need not worry about anything. Your accountant will take care of your deadlines, remind you for payment and ensure you pay minimum legal tax. He will use the correct VAT Scheme for you. While he takes care of these accounting responsibilities, you can focus on running and expanding your business.