When you are knee-deep in pipes, bricks, or wires, staying onside with HMRC is the last thing you want to worry about. However, it’s part and parcel of running a business. So, to help you concentrate on the job at hand, we thought we’d share five tips to keep HMRC happy! Read on for all the details.
5 Tips to Keep HMRC Happy for Trade Businesses:
1. Don’t Lose the Paper Trail:
Firstly, rule number one… Always keep receipts, invoices, and even that crumpled fuel receipt from the glove box. Or alternatively, start using Hubdoc! Find out how this software solution can help you in this article from the archives. HMRC loves a good paper trail; accurate records are your best defence against tax trouble. Think of it as building a solid foundation for your finances.
2. Keep To Deadlines:
We know deadlines can feel like a brick wall, but don’t crash into them! Instead, set reminders for tax return deadlines and file on time to avoid fines. Filing late can cost you more than just a slap on the wrist.
There’s a simple way to find out what your filing deadlines are:
If you operate as a limited company, you can search on Companies House for your company and see when your next accounts and confirmation filing deadlines are. The deadline for paying tax is nine months from the end of your accounting year
If you operate as a sole trader, your year-end is always the 5th of April. If you file a paper return, the deadline is 31 October 24; however, if you file online, it’s midnight 31st January 25. The deadline for paying tax is 31st January 25.
3. Separate Business and Personal:
Mixing business with pleasure is usually a bad idea, especially for your finances. Therefore, using a dedicated business account is important. This keeps your finances crystal clear and makes things a lot easier when it’s time to file your tax returns.
4. Use the Right Tools:
You wouldn’t use a spanner to cut wood; similarly, don’t try to manage your finances with a shoebox and a calculator. Invest in good accounting software that suits your business. At Tradermate, we love Xero and know you will, too. If you’re not already a convert, discover the benefits of Xero in this article from the archives.
5. Find a Bookkeeper:
Finally, even the best tradesperson knows when to call in a specialist. If you’re unsure about your tax situation, get some professional advice. A good bookkeeper can keep you out of trouble and might even find ways to save you some cash.
Keeping HMRC happy doesn’t have to be a chore. With these five simple tips, you can stay on top of taxes and return to what you do best—building, fixing, and making things work.