Tax Tips for Entrepreneurs
Making purchases to get a tax write-off is a common theme amongst entrepreneurs. The problem is it´s not the best idea you can use to reduce the amount of deductable taxes. In fact, more often than not it actually costs you more. However, there are other means you can employ to make sure you do not overpay tax. Take a look at our top five tips for entrepreneurs to save money and reduce their tax liabilities.
Seek tax help
It´s obvious advice for a chartered accountant to give, but self-employed patriots should seek professional tax advice. And we are not just saying that because we want your business, we know from experience that we save our clients far more money than they were doing when they did not have an accountant. The difference is that professional accountants know how to legitimately reduce tax liabilities without you needing to invest in something you don´t actually need just to get a write-off.
Keep your personal account separate
Once you do take the decision to seek tax help from a qualified account we recommend that you keep expenses for your business separate from the account you use for personal use. The reason for this is because it will take an accountant longer to prepare your tax return and subsequently jack up the cost. It pays to keep your finances organized which is why we prepare you an easy-to-use accounts sheet you can work with.
Pay estimated quarterly taxes
Another common error first time business owners make is they do not account for tax liabilities in their annual spending. It is recommended that you estimate your quarterly tax returns and pay them into a reserve that you intend to use to cover your tax expenses – just like you may have done in a PAYE scheme when you received a monthly pay slip from an employer. An accountant can help you calculate a likely figure to make sure you are covered when the time comes to pay HMRC taxes.
Set up the right type of business
When you begin life as a self-employed business you have to decide what form your company will take, either as a sole trader, partnership or limited company. There are tax liabilities for each type of business that you need to be aware – ideally before you start trading – although there is nothing to stop you from changing your company at a later date. You can find information on our site which will give you an insight to help you decide what type of business to set up.
Learn about tax reliefs
Although seeking advice from a professional chartered accountant is the best route, there is nothing to stop you from educating yourself in the basics of tax. Knowing what you can get tax relief for helps you start up your new business with confidence and not hold back on things you need to ensure you business achieves early success.
For more advice about how you can save tax and organize your finances contact Taxaccolega by emailing us at firstname.lastname@example.org or calling us on 0800 0235 234.