{"id":11964,"date":"2024-03-28T13:54:03","date_gmt":"2024-03-28T13:54:03","guid":{"rendered":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/?p=11964"},"modified":"2024-11-15T13:53:53","modified_gmt":"2024-11-15T13:53:53","slug":"preparing-your-business-for-tax-year","status":"publish","type":"post","link":"https:\/\/www.qualitycompanyformations.co.uk\/blog\/preparing-your-business-for-tax-year\/","title":{"rendered":"Preparing your business for the new tax year – 2024\/25"},"content":{"rendered":"

The 2024\/25 tax year begins on 6 April 2024. This is often one of the busiest times for many business owners, as they deal with year-end filings, review finances and performance, and make plans for another year of trading.<\/p>\n

To help you prepare your business in the lead-up to the new tax year and beyond, we highlight some of the key tasks you may have to deal with, as well as current tax-related information you should be aware of.\u00a0<\/span><\/p>\n

1. Close off the previous tax year\u00a0<\/span><\/h3>\n

Before turning your focus to 2024\/25, it’s important to close off the previous tax year properly. Settle outstanding bills if they are due before 6 April, and chase any outstanding invoices that still need to be paid. Make sure you’ve used all of your tax allowances for the year. For example, capital expenditures, private pension contributions, and any ISAs you have.<\/p>\n

Review all of your business and accounting records to ensure they are in order. You need to keep records and proof of all sales and income, business expenses, wages and dividend payments, tax records, and personal income. You must retain these for at least 5 years (if you’re self-employed) or 6 years (if you trade through a limited company).<\/p>\n

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If you sell physical products and your accounting period aligns with the tax year, you will need to carry out a stocktake to record all of the inventory that your business currently has. You’ll also have year-end payroll reporting to complete, if you process wages through payroll.<\/p>\n

2. Complete your annual payroll tasks\u00a0<\/span><\/h3>\n

If you employ staff or pay yourself a director\u2019s salary, you\u2019ll have several payroll tasks to complete for the new tax year<\/a>, including:<\/p>\n

    \n
  1. Processing your year-end payroll and sending your final payroll report (Full Payment Submission) of the 2023\/24 tax year to HMRC. This is due on or before the last payday of that year.\u00a0<\/span><\/li>\n
  2. Reviewing and updating employee payroll records to ensure they are accurate and complete, including tax codes. You will do this from 6 April 2024.<\/li>\n
  3. Updating your payroll software to ensure that it uses the correct rates and thresholds for Income Tax, National Insurance, and student loan repayments. You will do this from 6 April (or earlier, if required by your particular software provider).\u00a0<\/span><\/li>\n
  4. Provide a P60 to each of your employees by 31 May 2024.<\/li>\n
  5. Report all employee expenses and benefits to HMRC by 6 July 2024.<\/li>\n<\/ol>\n

    Be sure to check that all leavers and new starters have been processed correctly before sending your final Full Payment Submission<\/a> or\u00a0Employer Payment Summary<\/a> for the previous tax year to HMRC.<\/p>\n

    Tax rates, thresholds, and updates for your 2024\/25 payroll<\/span><\/a>\n New employment laws for 2024 you need to know<\/span><\/a>\n Changes to UK company law – what you need to know<\/span><\/a>\n <\/p>\n

    The National Living Wage (NLW) and National Minimum Wage (NMW) increase on 1 April. Ensure all workers are being paid at least the minimum rate for their age from this date. Be aware that workers aged 21 and 22 are now entitled to the NLW.\u00a0<\/span><\/p>\n

    If you’re planning to issue bonuses, or you need to pay employee expenses, make sure these are processed in the correct tax year and included in business costs for the appropriate accounting period.<\/p>\n

    3. Check tax rates, allowance, and reliefs for 2024\/25<\/h3>\n

    The first day of the new tax year is when most changes to tax rates, thresholds, reliefs, and allowances come into effect. The UK Government typically confirms these a few weeks before in the Spring Budget. The 2024 Spring Budget<\/a> was announced on 6 March.\u00a0<\/span><\/p>\n

    The Scottish Government, Welsh Government, and Northern Ireland Executive have also released their respective budgets. These confirm devolved taxes and other key economic measures for the year ahead.<\/p>\n

    Review all of the tax information applicable to your business (and to you personally) to confirm what you\u2019ll be paying in 2024\/25. Check which allowances and tax reliefs you\u2019re eligible for, and create a list of deductible expenses you can claim to reduce your tax bills.\u00a0<\/span><\/p>\n

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    There is no change to Income Tax in England, Wales, and Northern Ireland. However, there are several changes to Scottish Income Tax<\/a> rates and allowances for the new tax year. The UK government has also cut National Insurance rates<\/a> for employees and the self-employed.<\/p>\n

    Furthermore, the dividend allowance has been cut to \u00a3500 for 2024\/25. If you\u2019re a company owner, the rates and allowances for the new tax year are key to working out the most tax-efficient combination of director\u2019s salary and dividend income to pay yourself from 6 April.\u00a0<\/span><\/p>\n

    4. Confirm your filing and tax payment deadlines<\/h3>\n

    Most business owners have several filing and payment deadlines to meet throughout the year. Confirm all applicable deadlines for the new tax year as soon as possible. Make a note of them in your calendar, and set reminders to avoid penalties for late filing or late payments.\u00a0<\/span><\/p>\n

    1 April 2024<\/b>
    \nNew National Living Wage and National Minimum Wage rates are effective from this date. Increases to     VAT registration<\/a> and deregistration thresholds also take effect. \u00a0<\/span><\/p>\n

    6 April 2024<\/b>
    \nThe first day of the 2024\/25 tax year. Most new tax rates, thresholds, and allowances apply from this date. Self Assessment filing for 2023\/24 also opens, so you can submit your tax return for the previous year at any time from 6 April.\u00a0<\/span><\/p>\n

    31 July 2024\u00a0<\/span><\/b>
    \nThe deadline for making a second payment on account. <\/b>If you are due to make     payments on account<\/a> (advance payments on your tax bill) through Self Assessment, your second payment on account for your 2023\/24 tax bill must reach HMRC by this date.<\/p>\n

    5 October, 2024\u00a0<\/span><\/b>
    \nThis is the Self Assessment registration deadline for 2023\/24. If you need to declare self-employed earnings or other untaxed income (e.g. dividends) earned between 6 April 2023 and 5 April 2024, you must     register for Self Assessment<\/a> by 5 October 2024 (new users only).<\/p>\n

    31 October 2024<\/b>
    \nThe deadline for filing a paper Self Assesment tax return for 2023\/24. If you plan to submit a paper tax return rather than file online, it must reach HMRC by 31 October 2024. If you miss this deadline, you can file online instead.<\/p>\n

    31 January 2025<\/b>
    \nThis is the deadline for filing an online     Self Assessment tax return<\/a> for 2023\/\/24 and paying any tax that you owe for the same period. There’s no need to wait until this date. You can send your personal tax return and pay your bill at any time from 6 April 2024. If applicable, the first payment on account for your 2024\/25 tax bill also falls due on this date.<\/p>\n

    Deadlines for VAT-registered businesses<\/h4>\n

    If your business is VAT registered, you will need to submit a VAT Return<\/a> to HMRC every 3-month accounting period.\u00a0However, if you use the Annual Accounting Scheme, you only need to submit one VAT Return each year.<\/p>\n

    The deadline for filing your VAT Return is normally 1 calendar month and 7 days after the end of each accounting period. Any payment due must also reach HMRC by the same date.<\/p>\n

    Deadlines for limited companies<\/h4>\n

    If you operate your business as a limited company, you\u2019ll also have several company-specific deadlines to contend with. Keep on top of these to avoid facing penalties for late filing or late payments:<\/p>\n

    Company Tax Return<\/strong>
    \nDeliver a     Company Tax Return<\/a> to HMRC no later than 12 months after the end of your company\u2019s accounting period for Corporation Tax. You must include full statutory accounts with the tax return. \u00a0<\/span><\/p>\n

    Corporation Tax\u00a0<\/span><\/strong>
    \nPay your     Corporation Tax<\/a> bill within 9 months and 1 day after the end of your accounting period.<\/p>\n

    Accounts for Companies House<\/strong>
    \nFile     annual accounts<\/a> with Companies House no later than 9 months after the end of your company\u2019s financial year (or within 21 months of incorporation, if you\u2019re filing your first accounts).\u00a0<\/span><\/p>\n

    Confirmation statement<\/strong>
    \nPrepare a     confirmation statement<\/a> for Companies House <\/b>12 months and 14 days after either the anniversary of incorporation (if it\u2019s your first confirmation statement), or the confirmation date of the previous statement.<\/p>\n

    5. Review business finances and performance<\/h3>\n

    The new tax year is an ideal time to review the financial health of your business. Start by analysing your financial reports for the previous 12 months, to understand how your business is performing. This will help you to identify areas for improvement, make informed decisions in the new tax year, and set attainable goals for continued success.<\/p>\n

    When reviewing your finances and performance, think about the following:<\/p>\n