Bev Wakefield
Getting your ducks in a row for the new tax year can help make your business more efficient – and limit stress.
Bev Wakefield, owner of award-winning Vibrant Accountancy, is urging SMEs in the Midlands to plan ahead after research from Intuit QuickBooks revealed that 30% of small business owners surveyed found preparing for the start of the new tax year the most stressful and high-pressure time of the year in running and maintaining their business, second only to the busy Christmas period (51%).
The most recent tax year started on April 6.
Bev, who was shortlisted in the Business Desk Leadership awards last month, said: “It’s important to start thinking about your own personal tax situation and to make sure that you’re maximising any potential allowances and reliefs throughout the year.
“If you’re a business owner, then it’s time to look at the way you extract money. For the first time in a long time, we may see that bonuses may be a more efficient way to extract money than dividends for some people given the increase in the corporation tax rate, and so many other factors.
“As a business owner it’s important to look at your own personal financial set up and your company set up and look at how tax planning can help support your business.”
Bev, whose business is based in Lodge Lane, Derby, says that savings can be made by transferring income-producing assets to a spouse if they are in a lower tax bracket and there are ways, too.
“Other great examples of extracting money is looking at your pension contributions,” said Bev.
“Unused pension contributions can be rolled forward for three years and the recent announcement by Jeremy Hunt during the budget saw the lifetime allowance – the total amount workers can accumulate in their pension savings before paying extra tax – abolished.
“This means that those who had already reached their pension savings cap can continue to save, and whilst the 25% tax free amount you can draw down at 55 will remain capped, it does mean that those who thought they couldn’t contribute further can now.
“Additionally, we saw the annual cap of £40k pension contribution allowed to be made without triggering a tax charge, this has now been increased to £60k.
“This will make an efficient way to extract money out of your business, although we appreciate it will not be available to all.
“For parents working 16 hours a week, they can also take advantage of 15 hours free childcare to encourage caregivers to enter the workforce. This is, though, for children between the ages of nine months and five years.
“It will be staggered from April 2024 to ensure enough places. Children up to the age of two will get 15 hours free from April 2024; children from nine months will benefit from September 2024 and, from September 2025, every single working parent of a child under five will have access to 30 hours free childcare per week.”
The same survey by Intuit QuickBooks found that creating new business plans each year with updated resolutions and goals helped to ease the burden on business owners, making them feel more structured (30%), organised (33%) and confident in how their business will succeed (23%).
Bev added: “Planning for the new tax year helps you stay in control, so there’s real value in running through the points mentioned above. It’s also great to do the wider business plan too with you at the heart of this.
“But we understand that, as business owners, there are a million things to do, so that’s why it’s advisable to get help – and we’re more than happy to support.”
