How to prepare for the new tax year

The start of the new tax year is on the horizon, which means now’s an ideal time to review your finances and make sure you’re set up for the months ahead.

Getting organised now is likely to make managing your tax responsibilities easier further down the line, and a little preparation can help you avoid last-minute stress, stay on top of deadlines, and ensure you’re claiming everything you’re entitled to.

Here are a few simple steps to help you get ready.

1. Bring your records up to date

Make sure your financial records are accurate and complete. If bookkeeping has slipped down the to-do list, it’s time to catch up. That means checking that all income and expenses are properly recorded, and making sure nothing’s been overlooked.

Consider reviewing things like:

• Income from clients and/or customers

• Business expenses

• Invoices you’ve issued

• Payments you’ve received

Keeping clear, organised records throughout the year can make filing tax returns less stressful, and can also help you get a clear picture of how the business is performing.

2. Review your business expenses

Look at the expenses you’ve claimed to make sure you’re not missing anything. A bunch of everyday costs associated with running your business may count as allowable expenses, and these reduce your taxable profit, which can ultimately lower your tax bill.

Typical examples include:

• Office equipment and/or supplies

• Travel for business purposes

• Professional services (like accounting)

• Software or subscription tools you use for work

If you’re unsure what qualifies, checking now can help you avoid overlooking legitimate claims.

3. Check your upcoming tax deadlines

It helps to know what’s coming up. For sole traders, this might include the Self Assessment tax return deadline and any payments on account you need to make. If you run a limited company, you’ll also need to keep track of your Corporation Tax deadline and when your accounts need to be filed.

Checking key dates now can help you avoid penalties later. Also, setting calendar reminders can make it easier to stay on track as the year progresses.

4. Check you’ve set aside enough for tax

Managing cash flow is a non-stop task for small business owners, and tax payments can catch people off guard if they haven’t planned ahead.

Take a moment to review how much you’ve already set aside and compare it with what you’re likely to owe. Learning about a shortfall early can give you the time to get things sorted.

For the year ahead, it might be worth regularly moving a portion of your income into a separate account dedicated to tax. That way, when the bill arrives, the money’s already ready.

5. Review your business details

The start of a new tax year is a good time to review your business setup and make sure everything’s still up to date.

You might want to check:

• Whether any contact details or addresses have changed

• If your business activities have expanded or shifted

• Whether your current structure still suits your needs

If you’ve grown or your circumstances have changed, it could be worth speaking to an accountant about whether your setup is still the most tax-efficient.

6. Contemplate the year to come

Now’s a natural time to think about your goals for the next 12 months. You don’t always need a complex financial plan – just a rough idea of where you want your business to go can help guide decisions.

Think about:

• Creating a basic business budget

• Forecasting your expected income

• Planning for larger purchases or investments

• Setting targets for growth

Planning for the new tax year doesn’t have to be complicated. By taking a bit of time to organise your finances now, you can start the year with a clearer view of your business, and fewer (hopefully zero) surprises when tax deadlines roll around.