Welcome to
Tax Accountant Epsom

In the UK, a tax return is part of the self-assessment process. Self-assessment is the system HMRC uses for collecting Income Tax. When we say “tax return”, we’re referring to the form (SA100) you fill out to report your income and calculate your tax liability. This form is a key part of self-assessment. You’ll need to complete a tax return if you’re self-employed, a company director, or have other income sources like property rental. The self-assessment process involves registering, keeping records, completing your tax return, and paying any tax due by the deadline.

There are several legal ways to reduce your tax bill, providing you with relief and peace of mind. First, ensure you’re claiming all allowable expenses against your income. For businesses, this might include office costs, travel expenses, or equipment purchases. Individuals can benefit from pension contributions, which offer tax relief. ISAs (Individual Savings Accounts) provide a tax-efficient way to save or invest. If you’re a higher-rate taxpayer, consider salary sacrifice schemes. For property owners, the Rent-a-Room scheme could help. Don’t forget about tax credits if you’re eligible. Always keep accurate records and receipts. Our tax accountant epsom can help identify tax-saving opportunities specific to your situation.

You must register for VAT when your taxable turnover exceeds £85,000 in a 12-month period. This is called the VAT threshold. Taxable turnover is the total value of everything you sell that isn’t VAT-exempt. You should monitor this closely as you approach the threshold. Once you hit it, you have 30 days to register. You can also register voluntarily if your turnover is below £93,000. This might be beneficial if you have lots of VAT-registered customers, as you can reclaim VAT on your purchases. However, VAT registration comes with additional paperwork, including submitting VAT returns, usually quarterly.

Good record-keeping is crucial for any business, ensuring your success and peace of mind. You should keep records of all business income and expenses. This includes sales and purchase invoices, bank statements, cheque book stubs, and receipts for business expenses. If you’re VAT-registered, keep records of VAT on purchases and sales. For employees, maintain PAYE records. It’s also important to keep mileage logs if you use a vehicle for business. Store these records for at least 6 years – HMRC might ask to see them. Digital record-keeping is becoming increasingly important with the rollout of Making Tax Digital. Consider using accounting software to streamline this process and ensure compliance.

The choice between sole trader and limited company depends on various factors. Sole traders have less paperwork and more privacy, as their accounts aren’t public. They’re often better for lower-income businesses. Limited companies offer limited liability, protecting your assets. They can be more tax-efficient, especially as profits increase. However, they involve more administrative work and costs. Companies pay Corporation Tax on profits, while directors/shareholders pay Income Tax on salaries and dividends. Sole traders pay Income Tax and National Insurance on all profits. Your decision should consider your income level, growth plans, risk profile, and need for privacy. An accountant can help you crunch the numbers and make the best choice for your situation.

If you’re struggling to pay your tax bill, don’t panic, but do act quickly. Contact HMRC as soon as possible – they may offer a Time to Pay arrangement, allowing you to spread your payments. This knowledge can provide you with relief. You’ll need to explain why you can’t pay and how you plan to pay in the future. Keep up with your current tax obligations while paying off arrears. Consider ways to improve your cash flow, like chasing overdue invoices or cutting non-essential expenses. If you’re consistently struggling, review your business model and pricing. Late payment can result in penalties and interest, so it’s crucial to communicate with HMRC and stick to any agreed payment plan.

An accountant can provide valuable support to small businesses beyond just filing tax returns. We can help with financial planning, creating budgets, and forecasting cash flow. Accountants offer advice on tax-efficient business structures and can identify ways to reduce your tax liability legally. We assist with payroll and VAT returns and ensure compliance with regulations like Making Tax Digital. For growing businesses, we can help with securing funding, managing growth, and improving profitability. Accountants also provide strategic advice, helping you understand your financial position and make informed business decisions. By handling your financial admin, we free up your time to focus on running and growing your business.