Tax and Your Business

More than ever the importance of filling out tax forms accurately is placing pressure on small businesses and the self-employed. This is becaause HMRC have recently revealed a clampdown on tax avoidance across all sectors, but with particular focus on small businesses and the self-employed.

This means that people from this sector could be hit with large fines and/or imprisonment for false accounting if they fail to submit accurate tax returns. The negative implications of this are obivous, but the stress it places on small firms and self-employed workers is huge. These people may be confused by complex tax brackets, particularly if their business is secondary to standard employment.

An easy solution is to employ an accountant, but this can be costly and may prove uneconomical. The solution, therefore, is to be as accurate as posssible when recording business transactions and to keep every single receipt for a business expense.

This will, ultimately, make it easier to distinguish between taxable profit and tax-free revenue. This helps businesses to reduce needlesss tax expenditure and prevent an unwelcome audit.

For useful information and tips on how to keep balance sheets and profit/loss report, visit:

http://www.hmrc.gov.uk/incometax/tax-right.htm