Five last-minute tax tips to make the most of this financial year
Business Advice expert and chief FreeAgent accountant, Emily Coltman, explains what business owners can do between now and 5 April 2018 to make the most of this financial year, offering five important tax tips.
The end of the tax year is just a few days away, so if you’re a sole trader or individual taxpayer you may be looking at whether there are any last-minute checks you can make to get your tax bill in order.
Check the timing of planned asset purchases
If you plan to buy a new large piece of equipment for your business, such as a computer, make sure you check how much you’ve already spent on large items of equipment so far in the tax year (assuming you prepare your accounts to 5 April each year).
The annual investment allowance, which lets you claim tax relief of 100 per cent of the cost of qualifying assets is currently 200, 000. However, you may have to pro-rata the annual investment allowance depending on what date you use for your accounting year end. Remember that this is not an allowance you can carry forward, so you either have to use it or lose it – and some assets, such as cars, don’t qualify for it.
You might also be able to bring forward tax relief if you have genuine business costs coming up soon. Incurring a cost in March rather than in April, means you could get the tax relief on it a year earlier.
For example, if you’re thinking about getting new business cards printed and your business’s accounting year coincides with the tax year, you should think about getting these done before 5 April.
Remember, unless you’re using the cash basis of accounting, expenses go into your business accounts when they’re incurred, not when you pay for them so even if you don’t pay the printer until 6 April, so long as (s)he did the work before 5 April and you have an invoice, you should be OK to put that expense into your accounts.
Emily Coltman is chief accountant to FreeAgent, provider of cloud accounting software for freelancers, micro businesses and accountants. She is passionate about helping the owners of small and growing businesses to escape their ?fear of the numbers? and she translates small business finance and tax into practical common sense speak.