The End of the Tax Year: Your Essential Business Owner's Guide to Saving Money and Streamlining Finances

Accounting Guide for UK Tech Startup Founders

The 5th of April 2024 signals more than just paperwork – it’s a potential turning point for your business’s bottom line. Strategic moves now lead to lower tax bills, healthier future profits, and a company positioned for success. Let’s stop seeing those forms as a chore and start wielding them as financial tools!

Don’t Get Caught Out: Key Deadlines

These are the non-negotiables for staying on HMRC’s good side. Keep in mind, filing online saves many a last-minute panic:

  • 5th of April 2024: Paper Self Assessment returns must be in.
  • 31st of October 2024: Submit your 2023/24 Self Assessment online and make your initial payment on account for 2024/25.
  • 31st of January 2025: That’s the cutoff for the rest of your 2023/24 bill, along with your second payment on account.

What’s Shaken Up This Year? Updates Business Owners Need

Tax regulations are never set in stone – vigilance is key:

  • Scottish Businesses: If you operate North of the border, take note of those separate income tax bands and thresholds.
  • “Basis Period” Shake-Up: For unincorporated businesses, if your accounting year-end doesn’t align with the tax year, understand the impact of these reformations.
  • Changes to Capital Allowances: Did any updates influence how you approach those major equipment or investment plans?
  • Mortgage Rules Revamped: Landlords and rental income earners, note that those deductions get calculated differently now.
  • Planning Was Key (Last Year): Those reduced Dividend (£1,000 in 2023/24, only £500 onward) and Capital Gains Tax allowances make proactive tax strategy even more valuable.

Your Arsenal of Deductions: Gather for Swift Filing

Organised records ensure a smooth return and maximise your savings:

  • Show Me the Money: P60s, pension statements, bank interest records, investment dividends – anything proving income flowing your way.
  • Business Expense Proof: Every deductible cost demands a receipt, invoice, or statement. Don’t lose out due to sloppy paperwork!
  • Sold Assets? Whether property or shares, those capital gains (or losses) need detailed calculations – remember, allowable expenses make a difference.

Boost Your Bottom Line: Allowances & Deductions to Know

Why leave profits overtaxed? Here’s what puts money back in your pocket:

Slash Your Tax Bill: The Dividend & Savings Game

Dividends from your business were practically tax-free money in the past. Now? It’s a time of shrinking allowances and tougher HMRC scrutiny. Here’s how to play it smart:

  • The Vanishing Allowance: Back in 2022/23, you had a £2,000 dividend allowance. Sadly, that drops to a measly £500 in 2024/25. Got profits to take? Act before the 5th of April 2024 to shield more from tax.
  • Family Shareholdings: Own the company with family? Consider paying dividends to use their allowances too. But remember, if you don’t have special share classes, those dividends must align with ownership percentages.
  • Savings in the Spotlight: Interest rates are up, which sounds good until your Personal Savings Allowance is swallowed up. That’s £1,000 for basic-rate taxpayers, only £500 for higher earners. Time for tax-savvy ISAs? Or are there shares with unused dividend allowances calling your name? Get an accountant to crunch those numbers for you!
  • Spouse Swap (Maybe): If your partner has a lower tax rate, shifting some savings into their name could be a shrewd move. This maximises those allowances and dodges unnecessary tax charges.

Boosting Your Future: Pension & Capital Gains Tricks

Think of these moves as investments in future financial peace:

  • Pension Power-Up: Every penny you put into your pension comes with juicy tax relief. Don’t have spare cash right now? Check if you can use any unused allowances from the past three years for a massive top-up before the deadline.
  • Watch the Clock on Gains: Got investments or properties to sell? Each year, you have that Capital Gains Tax allowance (£6000 for 2023/24, but dropping sharply in the future!) Sell in a year it gets used – it doesn’t roll over if you wait too long. Spouse got lower gains than you? There might be clever (and legal!) ways to work that angle!


Year-End is Launchpad Time: Position Your Business to Thrive

It’s about more than filing and forgetting. Think long-term:

  • Project the Numbers: Honest forecasts of income and expenses for the year ahead inform big decisions. Budget for that tax bill or set up regular savings accordingly.
  • Use Allowances Smartly: Can you time things differently to maximise these in NEXT year’s return? Proactive thinking wins here.
  • Is Your Structure Efficient? Sole trader, partnership, Limited Company… which minimises your tax burden as things stand today? Circumstances shift, so stay on top of it!
  • R&D Pays Dividends: If your business innovates, those Research & Development tax credits could mean massive rebates. Don’t underestimate them!
  • Proactive Beats Panicked: Payments on account a nasty surprise? Early estimates stave off future scrambles.
  • Salary vs. Dividends: How you pay yourself intertwines with both personal and business taxation. Tailored advice here can pay for itself many times over.
  • Use Profits or Reinvest? Do you extract funds this year, or is growing the company paramount? Both are valid for different situations.

HMRC Penalties: Avoidable Headaches

  • Act Don’t Hide: Late submissions? A basic return with estimates on time is smarter than fines. You can refine that paperwork later.
  • Can’t Pay? Talk It Out: If the bill looks insurmountable, get ahead of it! Contact HMRC to arrange a payment plan, minimising future interest penalties.

Your Partners in Tax Triumph: TAXACE LTD Accountants

While there’s satisfaction in a DIY return, complex situations or maximising lesser-known deductions and credits is where those experts shine. If sleepless nights over compliance, forward tax planning, or bespoke strategies make you crave advice, the team at TaxAce LTD is here to chart a brighter financial course for your business.

This year-end isn’t simply an obligation; it’s an opportunity for a healthier, more profitable enterprise. Embrace it, and build a business with rock-solid finances for years to come!

Contabila UK - Founder and CEO -TaxAce - Iurie Bivol

Iurie Bivol

Director TAXACE LTD

Entrepreneur and accountant with 15 years of experience in the UK.

Contabilitate UK - Senior Tax Assistant - Alina Costreie

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