Managing your tax accurately as a small business
As the owner of a small business, you’ll know just how many challenges you face every day to stay afloat. There are so many different things to manage, customers to please and staff to pay, which is why it’s no surprise that 50% of small businesses fail within their first five years of operating.
One of the areas that can be particularly difficult to manage is tax and always remaining accurate with it. Tax can be a tricky thing to understand and doing it can feel like climbing a mountain if you lack experience or know-how. Incorrect tax reporting can be very problematic for the UK government with the tax gap sitting at 4.8% and one of the reasons for this is mistakes in small business tax returns.
That’s why we’ve put together a handy guide on several ways you can manage your tax more accurately and avoid any unnecessary penalties.
Research financial jargon
When dealing with tax, you might see a lot of words that you don’t understand. This can make navigating it all a bit harder and it may seem even more daunting. Take time to research any words that come up so you fully understand them before going any further.
Get all your tax records together
If you can refer back to previous tax returns, then you can ensure your latest one is accurate. Without this information, you could accidentally leave deductions on the table or put yourself at risk of an audit.
Automate your process
Don’t want to do everything by hand? There are plenty of tax automation tools that you can now implement for your business, which will take out the difficult bits you have to deal with. These will make it quick and reduce the risk of human errors too, meaning your accuracy should be higher.
Know when to ask externally
If you’re struggling to deal with your taxes personally, then you can seek external help from professionals. These people will be able to either do your taxes themselves or offer training so you can eventually do it yourself.
Running a business means you face fresh challenges every day and staying on top of them isn’t always easier. Tax returns are one of the most important, however, so you must do all you can to stay on top of them and ensure you’re not putting your business at risk.
