It’s been a strange and difficult year all round due to the coronavirus pandemic, with supportive measures such as VAT deferral and other initiatives put in place to protect UK businesses. However, as we approach the end of 2020, one accountant is warning business owners not to leave their tax until the last minute.
Aaron Gilmore is the owner of TreyBridge Accountants, a tax specialist based in Hull and London that works with clients across the UK: “Whilst the government and HMRC have done a great job of giving businesses a little breathing room, the clock is quickly ticking down to certain deadlines. Whether you’re a sole trader, company director or involved in a partnership, now’s the time to be thinking about what needs to be done regarding tax.”
In late September, Rishi Sunak enhanced the VAT deferral scheme so that businesses that deferred from 20th March to 30th June have the option to pay the total in smaller chunks over a longer period. Rather than the full amount being due by 31st March 2021, a business owner can make multiple payments up to the end of March 2022 without accruing any interest.
“Whilst this is excellent for managing cash flow, there’s the risk of failing to effectively budget and forecast,” says Aaron. “The months can fly by for a business owner, so you need to ensure that your tax is planned precisely in order to avoid cash flow problems in the near future.”
There are multiple other tax dates coming up, including corporation tax and self-assessment, as well as PAYE and NIS contributions depending on the type of business you run. Meanwhile, the Domestic Reverse Charge for VAT on construction and building services comes into force on 1st March 2021, and payments for Capital Gains Tax and Income Tax are due even sooner.
“Tax can be a very complicated process due to the sheer volume of types and deadlines,” adds Aaron. “Aside from all of the paperwork and admin involved, there are of course the payments that need to be made on time so that late fees and interest aren’t added. It’s very easy to miss deadlines without a professional accountant on board, plus their role is to find opportunities for greater tax efficiency.”
Some examples of this include R&D Tax Credits, Patent Box tax relief, capital allowance on property, pension schemes, creative industries relief, work from home allowance, the claiming of business expenses, and even the planning of a Christmas party for employees.
Aaron says: “Whenever we take on a new client, they’re always amazed by how many tax-efficient options there are out there. Our job is to analyse your current setup, pinpoint areas that can be improved, and ultimately save you money whilst ensuring compliance with HMRC and Companies House. Sometimes a quick phone call can save a business thousands of pounds a year.”
Working with sole traders, limited companies, partnerships and start-ups, Aaron invites business owners across the UK to get in touch on 01482 235575 for tailored tax advice and management services.