Countless small and medium-sized enterprise (SME) owners have bad book keeping habits. As a result, many are losing track of expenses and failing to properly manage finances. Revenue drives businesses, yet many entrepreneurs don’t treat accounts with the respect they deserve. Ditch your bad habits today to benefit your business tomorrow.
Wasting time
Opt for virtual expense management software to help you track your on-the-go spending. Too many business owners are manually tracking expenses, and making their accounts susceptible to human error. Plus, jotting down transactions, collecting receipts and spending countless hours logging every single transaction is a needless waste of time.
Instead, rely on business accounting services to do the work for you. Of course, it makes accountants’ lives easier if you keep an accurate, thorough record of your outgoings, income and recurring payments.
You have enough on your plate already – don’t waste any more time than is necessary to track your expenses. Enlist virtual and professional assistance to help you stay on top of your finances.
Over-complication
Consistently categorise costs, otherwise they’ll be hard to keep track of. Avoid making things confusing for yourself later by classifying things the same way from month-to-month.
Inconsistency
If you called HMRC’s telephone service ‘worse than abysmal’ you’ll most likely be told that you are putting it mildly. A survey carried out in December 2015 found that taxpayers had to wait an average 38 minutes for an answer. This is higher than last year’s average of 18 minutes. Imagine January when millions of taxpayers are trying to get through. Filing now will help you avoid the rush.
Clutter and neglect
These two mistakes are closely related. Many SME owner-operators allow receipts to pile up, software to expire and records to become outdated. Use a simple system regularly and consistently in order to ensure you’ve always got an accurate understanding of your business’s financial health. Procrastinating is understandable, as book keeping can be tedious, but bear this in mind: the longer you leave it, the more out-of-hand things can get.
5. You won’t overspend on Christmas’
Christmas is the most wonderful – and expensive – time of the year and it’s easy to spend more than you have. It’s much better to find out what your tax bill is so you can budget to pay and know what you have left over to play with.
Avoid HMRC’s infamous £100 penalty
If you want people to do what you want, fines can be an incredibly useful tool. At least that’s what HMRC thinks. Filing early will help you avoid HMRC’s progressive late-filing penalty system:
- An instant fine of £100 if you miss the January 31 deadline
- A penalty of 5% of tax due if you fail to file within 30 days
- If you don’t file by 30 April, you get a daily penalty of £10 per-day (for up to 90 days)
- A £300 (or 5% of the tax you owe, whichever is greater) fine if you still haven’t filed after another 90 days
- Another £300 (or 5% of the tax you owe, whichever is greater) if you haven’t filed within a year
- More penalties - including up to 100% of the tax owed, if HMRC believed you are deliberately delaying
What this means is you will be looking at a minimum fine of £1,600 if HMRC fails to see your tax return within a year. Penalties are not the best way to spend your hard-earned cash. We think it’s better to pour yourself a cup of coffee and get started.
Get professional advice at reasonable rates
What is the one similarity between advisers and airlines? They both get expensive during peak seasons. Enrolling a professional to file on your behalf gets expensive as you move closer to the deadline mostly because existing clients get priority during tax season. Start looking now and you will have a better chance of finding the right professional. They will definitely charge you to file on your behalf, but it is also likely they will cut your bill by far more than they cost.
It might surprise you that close to 870,000 taxpayers missed the deadline last year. If you think you will be one of them, get started now!
If in doubt, call us on 020 8303 1287 or email contact@bradleysaccountants.co.uk
So what’s changing?
One of the biggest implication of MTD would be the end of the annual tax return. By 2020 most businesses, landlords and self-employed taxpayers will be required to manage their tax affairs online and update HMRC on at least a quarterly basis.
HMRC has confirmed that this doesn’t mean you’ll have to complete four tax returns a year. You’ll simply have to update your information online more regularly.
"By using both functional and expressive voices, we'll create more space for brand relevance, connection and joy."
The guideline adds, “When we have the space, we tell a passionate coffee story. But even with just a few words, our copy can make you smile.”
Similarly, Starbucks recently rebranded its logo to the simple Siren logo without the “Starbucks Coffee” wordmark wrapped around it. The company notes, “The preferred approach is to use the Siren logo by itself, unlocked from the wordmark. This allows flexibility to present the Siren with greater prominence while maintaining a considered, open and modern presentation.”
Ultimately, this most recent Starbucks rebrand is simple and effective. Rather than moving too far in the opposite direction of the brand’s roots, the company sticks to its fundamental company vision while making slight alterations to continue serving the needs and preferences of its consumers.
