Four Tax Preparation Tips to Follow

No-one wants to feel stressed about tax! Avoid feeling overwhelmed and follow these four simple steps to get prepared.

Tax season always feels a bit daunting. There’s extra work to do and potentially a sizeable bill at the end! It can feel very stressful but with proper planning you can prevent that.

Get your paperwork organised

Your accounts always start with what happened last year so, this is where you need to start too. Start by sorting out any past years’ documents.

Tax paperwork should be organised by category and you may find it useful to scan and save copies of important documents received by post to make it easier to share them with your accountant.

Categorise Business Expenses

This is best started from the first day you start spending! The more organised you can be with your record keeping from the start the better. Organising and categorising your business expenses helps you know what you spend on and helps your accountant prepare your tax return. They should also help you understand what categories you should be using.

A lot of your business expenses can be claimed as tax deductions. Your accountant will help you and the official guide is always available on HMRC’s website.

Keep the expenses itemised and have an explanation for each one.

Check Whether You Can Get Deductions and Credits

Small businesses may qualify for a number of tax credits. This is something to talk to your accountant about and do it early on.

Deductions reduce your taxable income and credits are even better, as they directly reduce the amount of tax owed. Your accountant or tax preparation software will have a list of tax deductions that apply to your business.

Use a professional

Unless you have an in-house accounting team of qualified accountants, as ever, the benefits outweigh the cost when it comes to seeking the advice of an accountant to look at your tax affairs. While you are an expert in your business, they are an expert in theirs, and that expertise is what you need to ensure that someone oversees and examines the company accounts before they are submitted.

For most business owners, tax season is far from the favourite time of the year. However, it’s not an excuse for you to wait until the last moment to start preparing your tax return. To avoid unnecessary stress, the best course of action is to let an accounting expert handle your tax affairs.