Frequently asked questions for business owners

“Try to speak to HMRC early – either yourself or through your accountant. They can sometimes arrange a Time to Pay agreement to spread the cost but ignoring the problem will only make things worse with penalties and interest.

“Remember, it’s always better to pay on time wherever possible. Penalties start at £100 the day after your agreed payment date and can increase to 20 per cent of the unpaid Corporation Tax if you still haven’t paid within 18 months of the end of the accounting period.”

– Yisroel Sulzbacher, Accounts Senior

“We always recommend you keep your personal and business finances separate which can help you delineate between your tax filings and accounting. Equally, I strongly suggest you record everything in real time rather than doing it all at the end of the month. You should double-check your VAT, payroll, and expense claims once every two weeks ideally but there’s nothing wrong with doing this once per month.

“I’ve often noted that many errors come from rushed bookkeeping or misunderstanding the rules so it’s all about being proactive here.”

“I always suggest that you invoice promptly and follow up on late payments as soon as possible. The way you manage your stock and supply chain is up to you but the more efficiently it works, generally it’s easier to improve your cashflow management. Reviewing payment terms with suppliers and customers can also make a huge difference.

“Finally, you should be creating forecasts on a semi-regular basis or whenever there’s a significant change to your revenue/business model.”

– Ian Sluckis, Partner

“This all depends on the structure of your business but you may be liable for Capital Gains Tax in certain circumstances. The positive news is that reliefs, like Business Asset Disposal Relief (BADR), can reduce the tax rate to 10 per cent if you qualify.

“Importantly, planning ahead can save thousands in the long run and you should always have a rough idea of when you plan to exit the business. It may require help from an accountant to work out an ideal timeline but, trust me, it’s worth doing.”

– Adam Caplan, Partner

“If you want to manage your own payroll, you’ll need to stay up to date with PAYE, National Insurance, and pension contributions. These change every now and again – especially after a Budget or Spring Statement announcement by the Government.

“If you’re going to handle payroll yourself, you should use payroll software that’s HMRC-compliant to avoid late or incorrect submissions. This may help you account for things like Benefits-in-Kind or expenses but, if not, you’ll need to factor these into your numbers.

“Although not so much a tax issue, it’s important to remember, there are very strict laws on how much you pay your employees (and yourself). You cannot pay below the minimum or national living wage and these differ by age group.”

– Ahmed Nawaz, Payroll Semi-Senior

“Tax audits aren’t always a sign that HMRC suspects you of fraud but they should be treated with sincere caution. You need to keep thorough, organised records and be ready to explain any unusual transactions.

If you’re facing a tax audit, we strongly suggest having an accountant on hand to make the process smoother and less stressful. We do not recommend trying to handle this yourself. As your representative, your accountant can act as a go-between with HMRC and protect you from personal scrutiny to some degree.”

– Sam Bacall, Partner

“Obviously, we’re biased here. We think having an outsourced accountant is one of the greatest advantages that any business could have.

“By outsourcing, you save time, reduce your chance of making tax filing errors, and gain expert insight without the cost of a full in-house team.

“Outsourcing can also give you access to tech and expertise you may not otherwise have so if you’re currently struggling to stay on top of things, it may be a good option.

“That being said, you don’t need to outsource every aspect of your accounting. If you’re currently getting on alright with your payroll or your company secretarial obligations, you may just want to outsource the accounting side of things. Most firms, including our own, will off you a competitive rate for this that is unlikely to break the bank!”

– Ian Sluckis, Partner

“Do you know your VAT registration threshold? If so, all you need to do is apply the correct rates, and file returns on time under Making Tax Digital rules. Sounds simple, but it’s not.

“You’ll also need to be able to prove to HMRC that you’re maintaining Kittel compliance – i.e. all of your suppliers are compliant with VAT, regardless of whether they are EU/UK based. You’ll also need to keep detailed digital records as HMRC requires you to prove that you are maintaining compliance with VAT.”

– Sam Bacall, Partner

“Fundamentally, there are a wide range of reliefs that can reduce your Corporation Tax bill if you know how to use them. These include R&D tax relief, which rewards companies that invest in developing new products, processes, or services (or improving existing ones), and the Annual Investment Allowance, which lets you deduct the full cost of qualifying equipment and machinery from your profits up to a set limit.

“Capital allowances go beyond that, covering items such as vehicles, plant, and integral features in buildings.

“Certain sectors can also benefit from specialist schemes, such as creative industry tax reliefs for film, TV, theatre, and video game production. Because we have many clients in the entertainment and creative industries, we are very experienced in leveraging these reliefs.

“There are also reliefs like Business Asset Disposal Relief (BADR) when selling a business, and enhanced deductions for environmentally friendly investments.

“Identifying and claiming the right reliefs can significantly improve your cash flow and free up funds to reinvest in growth but you’ll need to be careful to maintain compliance with tax law in the process.”

– Adam Caplan, Partner