How can I stay on top of my business taxes?

This is something we hear a lot and is a common problem for small business owners. It’s hard to find time to manage your finances, especially keeping track of taxes and tax estimates as it can be quite complicated if it’s not something you’re used to.

The main thing to do that will help enormously is to keep your finances in order. Accurate financial records will make it much easier to get the information you need to estimate your tax liabilities or to find out what they are. For example, if all the information in your accounts is accurate, accounting software such as Xero will keep track of VAT and tell you what is due to be paid to HMRC.

A good way of ensuring that you have the cash to pay taxes when they are due is to open a separate bank account that you transfer money too each month to cover your taxes. As mentioned above if you’re estimating it correctly, you can transfer the correct amount so that when it comes to the time to pay up then you already have it in an account so it’s not a major hit to your business finances. You could even open a high interest account and earn some interest on the money you’re saving for taxes.

Knowing that you have that money set aside really helps to reduce the stress as it gets nearer to paying taxes and will also help to avoid any fines or late payment fees.