Here we are at the start of a new tax year so I thought I’d start off with my number one tax tip. It’s my number one tip to new business owners as well, because it’s so important. Do this before you do anything else, in fact. Not because it needs to be done straight away, but because it’s so easy to forget, and keep meaning to do it, and then find yourself a year on still meaning to do it!

What is this tip?

SAVE YOUR TAX MONEY

Just four words, it’s so simple. But failing to do it can lead to all sorts of problems: so open yourself (or your business) a savings account and every time you receive a payment, move a percentage over to the savings account.

What percentage? Well, that can vary depending on your circumstances. If you are a VAT registered sole trade you could need to put as much as 46% away to be totally safe, but if you are a start up with brought forward losses you might not need anything this year, so the best advice is to ask your accountant for a guide. Failing that, even a small amount, say 20%, will help if you stick to putting it away regularly every time you get paid. Then, of course, don’t dip into it!

Why is this my number one tip? Because you’re in business to make a profit, and profits mean tax. Time whizzes by and along comes a tax bill. I see clients where all the fun of making a good profit is ruined because they struggle to pay the accompanying tax bill. It is SO much less stressful to have the money available. If you’ve saved more than you need, you can always pay yourself a bonus!

Have a great year.