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NEW YEAR’S RESOLUTION NUMBER 1 – make 2010 the year to save for the inevitable tax bill

So we have all heard the quotation about nothing being as certain as death and taxes but how about this one

 

“Death, taxes and childbirth! There’s never a convenient time for any of them!” – Margaret Mitchell, Gone with the Wind 1936

 

January is always a month full of bills, whether you run your own business or not, as that wonderful Christmas and New Year break has to be paid for. Many of the small businesses we hear from also have to find the money to pay their tax bills each January too – the price businesses have to pay for their good trading record is a positive way of looking at it!

 

With a bit of forward planning and a regular saving regime starting now if you don’t already you can avoid a cash flow disaster for your business.

 

So make 2010 the year you start keeping proper records that enable you to calculate a rough profit at the end of each month. You can use a simple spreadsheet system or an off the shelf package such as Quickbooks and transfer 21% of this profit figure from your current account to a separate savings account. With rates of income and corporation tax so similar at the moment this basic calculation will do whether you’re a sole trader or limited company.

 

Whilst you’re busy setting this up you could also put a note in your diary to send your records to your accountant before September/October (if you have a March year end or are a sole trader). Having your accounts finalised and your tax bill calculated well before Christmas will leave you, and your accountant, to enjoy a stress free Christmas secure in the knowledge that there will be no nasty surprises to greet your business next New Year!

 

So what about your tax liabilities that are due now? If you haven’t planned ahead and are worrying about how you will pay then you can contact the HMRC Business Payment Support Scheme (0845 302 1435) and apply to defer your tax payments.

 

This column is written by  Jacqui Wingfield and Deborah Garvey from About Accounts. If you have any questions you want answered in future columns then please contact them on 01494 520801 or info@aboutaccounts.com.

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