Nine easy ways to prepare for the new tax year

The end of the tax year is here, which means it’s time to get your financial matters boxed off and make plans for the year to come. If you’re self-employed, this can be a busy time. But fear not: help is at hand. Here are some quick tips to help you get your business in good order and your finances up to speed before the start of the new tax year.

 

prepare for new tax year

 

Use up your ISA

This one’s straightforward. You have an annual limit as to how much you can pay into your ISA and this will reset at the start of the tax year: if you haven’t already, use it.

 

Get yourself organised

Now is the perfect time to round up all those stray expenses to claim relief for the current tax year. Also use this as an opportunity to organise receipts for the next year: create some storage space and, where possible, store a copy of any purchases electronically. This will stand you in good stead for your Self-Assessment Tax Return.

While getting yourself organised, look and see if you’ve had all your invoices paid for the last year. If not, now is the perfect time to give your clients a gentle nudge.

 

Reassess your business goals for the upcoming year

Just like making New Year’s resolutions, this is the perfect time to reflect on the past year and set some new goals. Consider whether you did everything you intended, whether you invested your money wisely and whether there’s anything still outstanding you’d like to make work. Whether it’s a new skill you’d like to learn or a financial target to meet, the new tax year is the best time to reforecast.

 

Review your business insurance needs

If your business has changed or expanded over the past year, it might be time to think about the type of insurance you need. This can provide peace of mind and keep you protected from any of the pitfalls you might come across as a contractor or a freelancer. The type of insurance you’ll need will depend on the nature of your business and your working practices, so it’s worth investigating what’s best suited to your needs.

 

Start filing your accounts digitally

Starting in April 2019, the new initiative known as Making Tax Digital means all VAT returns must be filed digitally using HMRC’s approved platform. Though this will only affect businesses with an annual turnover of £85k initially, but it’s still good practice to align your returns with this. The new financial year is the easiest time to change the way you record your financial information.

 

Think about topping up your pension

State pension contribution costs are set to rise in April, so if you haven’t already done so, now could be a good time to top up yours.

 

Invest any excess profits

If you have any outstanding finance left over in your company, make sure you use it wisely to reduce the amount of Corporation Tax you pay. Some easy ways to take care of this are to top up your salary if you’re still under the personal allowance threshold (this is currently set at £11,850) and to claim all you can in expenses.

 

Update any old equipment

New (tax) year, new you. Whether it’s an out-of-date computer, a set of old tools or even a uniform that’s seen better days, if you’re required to use specific tools or materials for your job, you can claim it as an allowable expense. Just remember to keep all receipts handy for your tax return.

 

Make sure you’ve got work lined up

When you’re thinking about how to distribute your finances throughout the tax year, you should be sure you’ve got work lined up. Take some time to reach out to any old clients, to plan for the coming months and make sure you know where the money is coming from. This will help you to better distribute your wages and ensure you’ve got enough to keep you afloat during any slow periods.

Specialist accountants like SJD Accountancy understand the demands that contractors and freelancers have on their time. That’s why we’re here to make your business life as easy as possible by providing advice, insight and support on everything that accompanies the self-employed lifestyle.

Meet the author

SJD Accountancy
SJD Accountancy is a UK-based accountancy firm that provides accountancy services to contractors with private limited companies.