April 5th marks the end of the tax year, providing the ideal opportunity to bring your business affairs up-to-date and plan for the upcoming months.
Simple planning measures can help you to make the most of the allowances and reliefs available and improve access to working capital at the end of each tax year.
Here are some simple tips to help you use the new tax year to your advantage:
1. Keep proper records
You may not wish to spend valuable time keeping records, but in the long run accuracy could save your business money. Keeping records not only allows you to monitor the progress of your business, but also means you can ensure you pay the correct amount of tax.
You should take care to record all invoices and receipts so that you aren’t faced with surprise costs when you complete your tax returns at the end of the year.
2. Find out what tax allowances, limits and deadlines are in 2018-19
It can cost you dearly if you’re unaware of changes to allowances, limits and deadlines.
The new tax year runs from 6th April 2018 to 5th April 2019, and there are a few key things to be aware of this year:
- Corporation tax remains at 19% for all businesses
- VAT registration remains frozen at £85,000 until 2020
- The dividend allowance will fall from £5,000 to £2,000
Make sure you investigate the changes that could affect your business and plan accordingly.
3. Look for any schemes that could benefit your business
You can save money by being aware of schemes that aim to help your business thrive. For example, this year, the Enterprise Investment Scheme limit has been increased to £2,000,000 which is great news for small businesses trying to attract investors to help them grow.
4. Plan for rises in minimum wage and pension contributions
On the 6th of April, rises in minimum wage and minimum pension contributions could have a big impact on many businesses cashflow.
This year, minimum wage rises from £7.50 to £7.83 for all those aged 25 and over. Similarly, the minimum employers can contribute to pensions has risen. Employers must double contributions from 1% to 2% of the employee’s salary, provided the employee does not opt out of the scheme and contributes 3% themselves.
These costs are likely to hit small business hardest, so it’s important to ensure your business has planned for these rises and incorporated them into monthly budgets to prevent increased staffing costs from effecting your cashflow.
5. Use Invoice finance
If rising costs associated with the 2018-19 tax year have had an impact on your working capital, invoice finance may benefit your business.
Invoice finance can help you to unlock money tied up in unpaid invoices and will help you manage your cash flow despite stresses in other areas of your business.