We try to make sure our clients are on top of the important things before their year end comes around and so we see our clients in plenty of time, but what are the key things businesses need to consider in advance of the end of their financial year?
1 Management Accounts. You need to know how you’ve done in the year before you can make any sensible decisions and make proper tax planning, so getting the accounts up to date is very important.
2 Timing of capital expenditure. If you have a large item of capital expenditure on the horizon its worth considering making the investment prior to your year end. In most cases you can make a full deduction of the capital expenditure against taxable profits if its done and dusted before the year end. Think about it – the difference of a few days could advance the relief by a whole year.
3 Dividend Paperwork. If you have dividends to vote make sure that you take care of the paperwork in advance of the year end. That is strictly the way it should be done, and HMRC don’t consider them voted without the necessary paperwork.
4 Pension Contributions. If you want tax relief for any pension contributions then they have to have been paid out prior to the year end – this is one expense which cannot be accrued for tax purposes. This sort of payment needs to be planned well in advance particularly for a new scheme.
5 Bonuses. If your team are lucky enough to be receiving bonuses, then make sure this is fully documented prior to the year end or you may find that you can’t claim the tax relief in the current year. This may mean that the management accounts need preparing [see point 1]