If you have bad debts at the end of the tax year, you risk paying tax on money you haven’t even collected – this is particularly the case with VAT, which must be paid on sales regardless of whether or not the customer paid you for the goods.
By making sure you’re prepared for the end of the year on April 5th, you can minimise your exposure to bad debts, and make sure you are doing everything you can to recover funds, particularly if you have incurred the expense of paying tax on them.
First of all, make sure you have claimed any allowances you’re entitled to – annual tax allowances, capital allowances, and the £2,000 employer allowance if you qualify for it.
If your payroll is not already up to date, get caught up as a main priority – make this something to keep on top of throughout the year, not something you only pay any attention to at year-end.
Consider whether you need to use any new accounting and bookkeeping software for the new financial year, to help you keep everything under control, and so that you know your financial position at a glance more easily.
For this coming year, the introduction of auto-enrolment into workplace pensions could have a major effect on you, and it’s essential to remember that the sooner you get this sorted out, the more choice of pension schemes you’re likely to have.
And in terms of those bad debts mentioned above – if you’re going to have to pay the tax on them, you should do everything you can to make sure you recover the funds owed to you, so refer any outstanding invoices to us for collection, and we will do what we can.
If you don’t have strict payment terms and conditions in place, or your existing Ts & Cs are failing to make people pay on time, we can help with that too.
Contact us on 0808 271 8565 to find out more about getting custom terms and conditions of payment drawn up for your company or as a sole trader, and start the new tax year on the front foot.