Forward Planning Could Stop You Feeling The Pinch

Are you still feeling the pinch? A lot of people and businesses are still finding their finances being squeezed despite the fact that the recession could possibly have now ended. Official figures are due later this month and are predicted to show that it apparently ended some time between October and December.

For those who are still feeling the effects a little bit of tax planning could be well worth considering.

The Self Assessment 2008/09 balancing payment is due by 31st January 2010. BY the 31st you will also be due to make your first payment on account towards any 2009/10 liability. Your 2009/10 payments on account are based on your previous year’s liability so if your profits are expected to be lower than previously you may be able to reduce the amount of tax you pay and should consider submitting a claim to reduce the payment. A word of warning though, if it is later proven that you claimed to reduce the payment too far, interest will be incurred.

If you are struggling to pay you should ensure that your 2008/09 balancing payment is made if possible. Interest will accrue on any payment outstanding from 1st February. If not paid and it still remains outstanding after 28th February, a surcharge will also be made.

Another alternative open to those who are running an unincorporated business is to change the date to which you make up your accounts. This can enable any valuable overlap relief from when you started trading to be utilised so reducing your taxable profits. This has numerous implications and should only be done after seeking advice.

If you are unfortunate enough to be incurring losses ensure your accounts and Tax Returns are filed as early as possible, as a loss relief claim may be available which can provide essential cash flow.  If you are in a loss making position it is also important that you seek advice about when to call it a day as opposed to leaving it until it is too late!

If you are finding the recession is having an effect on your business then it is well worth speaking to your accountant, who may well be able to give you some valuable advice to help your business. 

Biggleswade Chronicle - 22 January 2010