Year-end tax planning for business owners

Joshua Kato, a Chartered Accountant & a-chartered Tax Advisor

As the end of the year approaches, business owners need to start thinking about their year-end tax planning. This is the perfect time to get your affairs in order and ensure you’re on track to save on your tax bill. In this guide, we’ll provide you with tips and strategies to help you save on your taxes. We’ll also cover what you need to know about accounts and tax returns and when to start thinking about your year-end tax planning. By the end of this guide, you should understand what you need to do to reduce your tax liability.

What do we mean by year-end tax planning?

Year-end tax planning is reviewing your financial situation and identifying opportunities to minimize the amount of tax you pay. This includes assessing your available reliefs and allowances for earnings, income, savings, and investments and ensuring you take advantage of them before they are reset at the end of the tax year. Understanding your options and making the most of them is essential, as there may be some carry-forward opportunities you are unaware of. Our financial planning and tax advisers can help you assess your position and determine the best tax planning strategies for your situation.

Basics of Accounts and Tax Returns

If you’re a business owner, you’ll need to keep accurate records of your income and expenses throughout the year to file your tax return accurately. This includes keeping receipts and documentation for all your business-related expenses. You’ll also need to keep track of your sales and income, including any money you receive from customers or clients.

The deadline for filing your tax return in the UK is 31st January of the following year. However, if you’re trading via a company or LLLP, you must file your tax return and pay the corporation tax within nine months of the year. It’s essential to file your tax return on time to avoid late filing penalties and interest.

When Should You Start Thinking About Year-End Tax Planning?

The sooner you start thinking about your year-end tax planning, the more time you’ll have to review your options and make any necessary changes. This is especially important if you’re considering making significant changes to your business, such as incorporating or changing your business structure. It’s also a good idea to start thinking about your tax planning early if you’re expecting a large income in the next tax year, as this could impact your tax liability.

Generally, it’s a good idea to start thinking about your year-end tax planning at least a few months before the end of the tax year. This will give you enough time to review your options and make necessary changes. If you’re unsure about your tax planning or have any questions, it’s worth seeking expert advice from a professional accountant or tax adviser. They can help you understand your options and develop a tax planning strategy tailored to your situation.

Conclusion

Year-end tax planning is essential for business owners to ensure they’re paying the minimum tax possible. By getting organized, using tax breaks, planning for changes, and seeking expert advice, you can develop a tax planning strategy to help you save on your tax bill. Start thinking about your year-end tax planning early to give yourself plenty of time to review your options and make any necessary changes.

JOSHUA KATO– ACCA – CTA – DITRA – BIDA – ADIT – CIA

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