Last-Minute Tax Year Checklist: What Every Small Business Needs to Do Before April 5th
As we approach the end of the tax year, it’s the perfect time for small business owners and sole traders to tie up any loose ends and make sure everything is in order before 5th April. Leaving things to the last minute can be stressful, but with a focused approach, it doesn’t have to be. Here’s a breakdown of the key tasks you should tick off now to ensure a smooth year-end and start the new financial year strong.
Reconcile Your Accounts
Ensuring that your bank statements match your accounting records is crucial. Discrepancies between what’s on paper and what’s in your account can cause issues with HMRC and delay your tax filing. Go through each transaction and cross-check it with your digital accounting software or manual records. If something doesn’t add up, now’s the time to investigate.
Chase Outstanding Invoices
Overdue payments can significantly impact your cash flow. Use this period to send reminders to clients with unpaid invoices. Consider offering incentives for early payment or follow up with a friendly phone call. Starting the new financial year with a clear slate will put your business in a stronger position.
Maximise Allowable Expenses
Take time to go through your expense records and ensure you’re claiming all legitimate business expenses. This includes everyday costs like office supplies, travel expenses and professional subscriptions. If you work from home, don’t forget about claiming a portion of your utility bills, internet usage and even council tax in some cases.
Make Last-Minute Pension Contributions
Pension contributions are a powerful tax planning tool. Contributions made before the end of the tax year can reduce your taxable income and help you save for retirement. Speak to your pension provider or financial adviser to ensure any top-ups are processed in time.
Consider Capital Allowances
Have you made any significant purchases this year – like new IT equipment, tools, or vehicles? These might qualify for capital allowances, reducing your taxable profits. The Annual Investment Allowance (AIA) lets businesses deduct the full value of qualifying items, up to a limit, from profits before tax.
Review Your Director’s Loan Account (if applicable)
Company directors who’ve borrowed money from their business need to ensure the director’s loan account is in credit by the end of the tax year. If the account is overdrawn, you could be liable for extra tax through the Section 455 charge.
Plan for Tax Payments
Forecast your tax liabilities and make sure you’ve set aside enough funds to cover what you owe. Don’t forget Payments on Account if you’re self-employed, as many people are caught out by having to pay a lump sum in January and another in July.
If you’re unsure where to start or simply want peace of mind, our expert team at Stonehouse Accountants is here to support you every step of the way. Get in touch today to beat the deadline with confidence.