How to Avoid an Unexpected Tax Bill
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How to Avoid an Unexpected Tax Bill
Receiving an unexpected tax bill is frustrating for business owners. While tax is an unavoidable part of running a business, unexpected bills can put pressure on your cash flow, especially if you don’t have enough money set aside throughout the year. However, with good financial planning, accurate bookkeeping and accounting advice, you can have a clearer idea of what you are likely to owe. That way, you can ensure the money is available when you need it.
At BCS Accountants, this month’s blog looks at how you can avoid an unexpected tax bill. For more information, contact us on 01524 824111.
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Understand Your Tax Obligations
One way to avoid an unexpected tax bill is to understand which taxes apply to your business. Depending on your business’s structure and your circumstances, you may need to account for Income Tax, Corporation Tax, VAT and National Insurance contributions.
Each tax can have its own rules and payment deadlines. It is important to understand what applies to your business and when these payments are due. An accountant can help you identify your responsibilities and ensure that tax is part of your wider financial planning.
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Keep Your Records Up to Date
When understanding your tax position, accurate bookkeeping is essential. If your accounts are behind, it can be difficult to know how much your business has earned, what you’ve spent and what your potential tax liability may be. By the time you realise you have a problem, you may not be able to fix it.
Keeping financial records updated gives you a clearer picture of your business throughout the whole year. It also makes it easier for your accountant to identify potential problems and provide useful advice before it’s too late.
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Don’t Forget Allowable Expenses
One reason your tax bill may be higher than expected is that you haven’t accounted for your allowable expenses. Depending on your business, legitimate business costs may be deductible when calculating taxable profits. These could include certain costs associated with running your premises, equipment, travel and more.
Your accountant can help you understand which expenses you can legitimately claim.
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Review Your Finances Throughout the Year
Regular financial reviews allow you to see how your business is performing and whether your expected tax liability is changing. This can turn tax planning from a yearly surprise into an ongoing part of managing your business.
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Contact BCS Accountants
If you require further advice, contact our team at BCS Accountants. We cover Morecambe, Lancaster and Kendal. Call us on 01524 824111. Alternatively, send us a message via our contact form and we’ll be in touch.
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Contact BCS Accountants
Address:
BCS Accountants & Tax Consultants
Care of – TRW Accountants
95 King Street
Lancaster, LA1 1RH
Contact Details:
Tel: 01524 824111
Fax: 01524 825327
Email: enquiries@b-c-s.co.uk
