The End of the Financial Year
With just under a month to go until the end of the 2020/2021 financial year most of us will be well on the way to organising the information needed to file our returns, but there may still be options that can be employed to help reduce this year’s tax bill.
Claiming all expenses, that were incurred wholly for the purpose of the business, can contribute to savings on the tax bill. Any employees who may have paid for business expenses out of their own pockets before submitting claims to the finance team. Collate all those receipts and ensure that they’re recorded in your return.
If any of your employees carry out substantive duties from home, which is not that unusual, you can claim upwards of £6 per week depending how complex your work from home requirements are. It’s important to understand what you can claim for, in terms of fixed costs (such as council tax, insurance, and repairs) and running costs (telephone & broadband, heating, electricity, etc). If you were to claim beyond the flat rate, keep detailed records of what you’re claiming just in case HMRC audited your accounts.
It’s likely that your company uses consumable office supplies, such as printer ink, paper, stationery, so stock-up on these items before the end of the financial year. Likewise, reviewing your IT equipment with a view to replacing old and depreciated assets before the tax year can effectively reduce the price of such items.
With company pension schemes being offered to almost all employees now, employer contributions are paid pre-tax, so can help to reduce your final tax bill. The end-of-year can be a good time to top-up pension contributions, provided the top-ups are received by the pension company before the year-end. Pensions are complicated financial products, so engaging the services of an IFA will provide you with a source of accurate and reliable advice.
The financial aspects of completing a year-end return are only one element of completing a successful financial year. Backing-up or copying your financial records, organising these records so that they would be easy to revisit later if necessary.
Finally, wipe the slate clean ahead of the 2021/2022 tax year by ensuring that invoices have been issue correctly, cheque payments are deposited, and any outstanding bills are settled.< Back to News