No one wants to pay more tax than they have to, especially in a recession.
So here are five top tips small businesses may find helpful in the current economic climate.
1. Don’t wait for HMRC to come after you if you owe them money. If you have trouble paying, talk to the Business Payment Support Service to arrange an deadline extension. They are currently very receptive to any reasonable deal (for example, we recently arranged a deal for £12k of VAT to be paid over 12 months).
2. If you’re self-employed and your profits are falling, look at your income tax payments on account – you may be able to reduce them.
3. Do you really need to be registered for VAT? The current threshold is £67k; deregistration may enable you to reduce your prices or keep more of your sales.
4. If you sell more on credit than you buy, consider the VAT Cash Accounting Scheme – you then only account for VAT on the cash which you collect. The threshold is £1.35m.
5. If VAT Cash Accounting isn’t for you, don’t forget VAT Bad Debt Relief can be claimed if your customer hasn’t paid you after six months.
