4 Smart Tax Moves To Make While Running Your Own Business

You are heading towards the deadline for 2019 tax and being a savvy business owner, the prep work for the tax filing and return you may have already started. So, before it is too late to reduce taxes that you’ll own before 31st October deadline, there should be certain tax moves to take in your business.

Keep your personal and professional accounts separate:

If you’re not an incorporated company, you have no need to keep a separate bank account for business. However, experts say it is a good practice though. Did you know why? Handling personal and company expenses in different accounts make it easier to keep the records intact and prepare for tax filing. With proper auditing by professionals, you won’t even have to sift through your personal transactions.

If you go by what experts suggest, create a separate checking account for any business-related expenses. All you have to do is open up a credit card account that will be used for business expenses, and your problem will solve halfway.

Follow expenses and taxes as you go:

Keep the practice of recording expenses as they happen, not six months after- this, in turn, can save time and reduce the chances of any errors besides maximizing the tax returns. Just think how time-killing it is to remember your transaction months before. So, instead of scrounging around for crumbled-up receipts, you can make use of new technology and expert bookkeeping services in London to make your life easier. Professionals are well-trained to use different payroll and accounting software.

Don’t forget to claim home office deduction:

Taxpayers who use their home space for business can get the money back through home office deduction. You can claim a proportion of the cost like council tax, heating, lighting, phone calls and broadband.

You can include your business cost in your self-assessment tax return, if you’re a sole trader or part of a business partnership. And, you may need to pay the capital gains tax on the part of your property that is being used for business, if you sell your home.

Track the tax deductions on business vehicles:

Just like home-office deductions, vehicles used for business purpose can be calculated on mileage allowance payments that you pay for employees upon using their own vehicle for business journeys, and you have to report that amount to the HM Revenue and Customs to deduct and pay tax.

However, there is a certain amount you can pay to employees without reporting to the HMRC, which is called the approved amount. So, if your employee travels 12,000 business miles, the approved amount should be (10,000 x 45p + 2,000 x 25p). For cars and vans, it takes 45p for first 10,000 miles and 25p for next 10,000 miles.

Lastly, consider hiring someone reliable to calculate tax filing and return for you. Financial advisors in London work alongside to give their clients the peace of mind by managing the return with caution, in good time that can avoid penalties.