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Running a business is exciting but comes with financial responsibilities. Getting it right means avoiding penalties, maximising savings, and keeping your business financially healthy. Yet, many business owners feel overwhelmed by tax rules, HMRC deadlines, and financial jargon.
In this guide, we break down everything you need to know about tax accounting, from expenses you can actually claim, to strategies that reduce your tax bill.
Layers Insight 💡: It can be quite confusing at first keeping track of all the different deadlines, one of the reasons, we actively encourage all business owners to setup both the companies and their own Government Gateway and add each of the taxes onto it, it’ll be a hub for you to always check where you are at, if you really want to you can setup Direct Debts that help keep you compliant, avoid those penalties!
One of the biggest mistakes business owners make is not claiming all allowable expenses, meaning they pay more tax than necessary. HMRC allows you to deduct certain costs (wholly and exclusively for the trade) before calculating your taxable profit, including:
Layers Insight 💡: In practice, we find business owners worried about what they can and can’t claim, and we find they will air on the side of caution (Rightly so!) but when you come to us, we need to help understand what expenses you might have, so track all business expenses and store digital receipts; this will make tax returns easier and help avoid errors. If you aren’t sure on what you can claim - ask away!
Smart tax planning isn’t about avoidance—it’s about making the most of tax-efficient strategies. Here’s how to lower your tax liability:
Layers Insight 💡: Sometimes, it’s worth paying the tax due, as to save tax you have to spend it, and it might not align with your current goals of growth or expansion. A common misconception is that by spending £100 you reduce your tax bill by the same amount, you save between 19-25% (as a Limited company) of what you spend, as it reduces your taxable profit by that amount, which we use to calculate your tax bill on!
Review your tax strategy before the tax year ends to take advantage of available reliefs.
Missing HMRC deadlines can result in hefty penalties and unnecessary stress. Here are key dates every business owner must remember:
Layers Insight 💡: Much like in consideration 1, the same advice applies here!
It can be quite confusing at first keeping track of all the different deadlines, one of the reasons, we actively encourage all business owners to setup both the companies and their own Government Gateway and add each of the taxes onto it, it’ll be a hub for you to always check where you are at, if you really want to you can setup Direct Debts that help keep you compliant, avoid those penalties!
Many small business owners try to handle tax accounting themselves, but this can lead to errors, missed savings, and wasted time. Here’s why hiring an accountant is a smart move:
Layers Insight 💡: There are accountants for all levels of business, and costs to access accountants can be very reasonable at all levels, in some situations you maybe able to self-serve. In my experience, we tend to find it’s always worth having a chat with a professional, as you may be making costly errors. Our advice is find an accountant who is approachable, and supports your business beyond just compliance.
Tax & accounting doesn’t have to be overwhelming. By planning ahead, tracking expenses, and working with the right accountant, you can stay compliant, reduce tax, and focus on business growth.
Need a business accountant in Cheltenham? At Layers Accountancy, we help businesses with tax planning, bookkeeping, and financial strategy. Get in touch today for a free consultation!
