Until you know what your profits are, you can’t work out your tax! Simple we know. One of the biggest overheads of most businesses is the tax bill and the sooner you know how much it is going to be and when it needs to be paid, the better. If you trade as a limited company and you get your accounts completed within two months of your year end, you still have seven months to work out how you are going to pay it.
If you are a sole trader or a partnership the opportunities are even greater. You should know what tax you are going to pay on the 31 January and July from your last set of accounts but did you know you might be able to reduce them? If, when your accounts are prepared the resulting tax position is lower than the previous year, we can apply to have those payments reduced.
Pre Year End tax planning
However we do tax this one step further. Within three months before the end of your accounting period we will undertake a comprehensive tax review of the accounts and other management information to enable you to consider a number of matters prior to the end of your accounting period in order to determine whether the business and you are likely to be able to benefit from the simplest and most common tax saving options. This is designed to help you pay your fair share of tax but not a penny more.
Therefore although the actual final tax liability cannot be determined until the accounts have been prepared, we will have a very good idea of what the liability is likely to be, almost 12 months before the due date. This will enable you to manage your cash flow accordingly.