OWNING and running the daily operations of your own business is extremely hard work, and adding the management of your accounts into the equation can create a real nightmare.
Alan Masson, head of tax at SBP Accountants and Business Advisers of Aberdeen, Peterhead, Fraserburgh and Banff, said that although it might only be approaching Halloween, it is vital as a business owner to start getting your accounts in order to avoid an unwanted horror story with HM Revenue & Customs New Year tax deadlines fast approaching.
Says a spokesperson: “This year’s paper tax returns, for the year ended 5 April 2015, must be with HMRC by midnight on 31 October – but fear not – you have until midnight on 31 January 2016 to complete online tax returns.
“The preparation of annual tax returns is time-consuming for any business owner, making it important to organise records throughout the year.
“Firstly, it is vital to keep anything and everything relating to your business as it is much better to be safe than sorry.
“Theoretically, HM Revenue and Customs can check everything, so you should take care and keep records of all documentation relating to your operations.
“If you are a UK taxpayer, you should keep a record of the tax you pay each year and other records relating to your income and outgoings. You’ll need these to help you complete your tax return or to answer any questions from HMRC about a return you’ve already completed.”
The spokesperson added: “If you have to send HMRC a tax return, you should keep all the records and documents you need to enter the correct figures. If HMRC needs to check your return, they may ask to see the records you used to complete it – if you don’t keep your records for long enough, you may have to pay a penalty.
“Make sure you keep interest, dividends or other income from UK savings, investments or trusts. You should keep all interest certificates, bank statements and dividend vouchers. You should also keep details of exceptional amounts you’ve received – for example, an inheritance or other windfall.
“If you get income from letting out a property, you’ll need to keep details of the rents you’ve received and the expenses you’ve paid.
“Foreign income or gains and Capital Gains Tax records should also be kept.
“It’s a good idea to keep any records associated with an asset you’ve owned in case you make a gain or loss when you sell, give away, transfer or exchange it.”
Mr Masson said: “If you are guilty of sorting out your financial information at the last minute, it is worth considering introducing a simple weekly or monthly system.
“If you are tackling issues and filing your documents regularly, your annual accounts and tax return won’t be such a daunting task.
“The chances of being selected for a random check by the taxman might be slim but business owners shouldn’t risk getting a hefty fine.”
SBP offers a variety of business and accountancy services, including personal and business taxation, as well as a dedicated business services department to cover everything including bookkeeping, VAT and payroll requirements.
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