The start of the financial year should represent more than a visit to your accountant. Ideally, you can use this time to plan ahead, make any necessary changes to your business model and ensure you’re completely prepared for the coming year.
Here are five steps you should take at the start of the financial year.
Consider your structure
Changing the structure of your business doesn’t necessarily have to happen at the start of the financial year, but it’s probably the easiest time.
You’ll have just received a final verdict on your finances for the year, and you’ll also be preparing for the next.
Changing structures may seem daunting, but it can be beneficial as you grow. For example, switching from being a sole trader to a limited company means you can better expand your business – but the lack of a personal allowance means the benefits are best felt once your profits start to exceed around £50,000.
File your annual return
The start of the financial year should be just that – there’s no reason for an incomplete annual return to be holding you back.
As soon as the new financial year starts, you need to have your annual return completed. If you need to make changes it’s best to know as soon as possible – especially if you find your company can’t cover what is due.
Additionally, putting anything off now can easily become a year-long affair, and that could mean missing the return deadline and needing to pay out a penalty charge.
See a financial planner
People often confuse accountants with financial planners, but you should really have the skills and experience of both on your side.
While accountants are most concerned with tax-related issues, financial planners can take a broader view of your business and adopt a more goal-oriented stance.
Advice can be given concerning anything from investing to budgeting, so it’s well worth seeing a planner at the start of each financial year.
Ask about new tax deals
The tax system can change each year. This often makes a big difference to businesses – particularly to sole traders.
For example, the higher-rate tax threshold, at which you’ll start paying 40p in tax for every £1 made, has risen from £42,385 to £43,000, while the tax-free personal allowance has risen from £10,800 to £11,000. This means you’ll have a little more to either spend yourself or invest back into your business.
Reward your team
The start of the financial year can be a stressful time for your business, so make sure you take the opportunity to reflect upon the successes of anyone working for you and reward them accordingly – even if that only involves a few words of appreciation.
Taking the time to assess each team member and evaluate their position within your business right at the start of the financial year allows you to better plan your upcoming strategy.
Don’t let the start of the financial year pass you by
To find out more about how you can make the most of the start of the financial year, get in touch with us today.