We know it is hard work sort out all of your financial and taxation obligations when you are starting in business or growing fast. We often get questions about how to deal some of the more intractable issues that we all face from time to time.
Here are just a few pointers to try and make your day a little easier.
Cars
Let’s start with cars. Lots of people of people come to us asking what’s the most tax effective way of running a car as though there is a magic formula. Our experience suggests that there just isn’t a generic answer. It really does depend on factors like how you have set your business up, what type of business you are running and how you are operating.We would even go as far as say that your tax position is less important than the deal you can get from the supplier.
- Registration
For those of you who only been trading for a short time then we need to remind you to register with HMRC for tax and National Insurance purposes. If you leave it for more than 3 months after commencing trading then you could get fined up to £100.
- VAT reclaim
If you have registered for VAT you can claim it back on, say, equipment purchases from when you started trading not just when you raised your first invoice.
- Cash Sales
If you have a cash sales business (e.g. a fish and chip shop) then you do nee to keep your cash till receipts at the very least. Not having a proper record will alert HMRC inspectors very quickly and remember that you need to keep information for at least 6 years. By the way after 6 years you are allowed to get rid of all of that paperwork.
- Expenses
Remember to keep receipts for all business related expenses (and that does include the cup coffee you had on the way to meet a customer) and record your activity – especially mileage. These expenses mount up over the course of a year and we are often surprised about how many people don’t record them properly and so lose out.
- Claiming for home use
Home based business people are sometimes disappointed when we suggest that they can only claim around £3 per week for use of utilities and space. The reason is that if you claim more then you may become liable to capital gains tax when you sell the property or face paying business rates! Neither of which seem to be an attractive proposition.
Running a successful business is no easy feat and we have been able to take away some of the stress for lots of people.
If you think that Lewis Smith & Co. could help you then just give us a call today on 01384 235549 or email us on info@lewissmith.com to set up a free, confidential discussion.
Lewis Smith & Co. – Management accountants for Stourbridge
