November 21, 2017

How much tax will you need to pay in January?

 

Tax, Weliington Consulting, Accountant

How much tax do I need to pay?

 

Every year I hear the same question:

 

‘Where am I going to get the money from to pay my tax bill?’

 

 This is closely followed by:

 

‘How much tax do I need to pay?’

 

The truth is, that from 6th April 2017 the calculation could have been done to establish how much tax you are required to pay. You may have had to wait for statement of interest from savings accounts, P11d forms, if you receive benefits from your employer, or rental statements, if you use an agent to manage your rental properties, but the truth is that by now you should have all the information available to complete it today.

 

If you haven’t, you need to ask ‘why not?’ because…

 

If you run a business, you need to know how profitable it is, where costs can be saved or what investment is needed. You need to be in charge. Leaving the calculations until after the end of the year is not good for sustainability. How do you know how much money to put aside for tax, unless you know what profits you are making? How do you know that you are charging enough to cover the costs, including paying you, unless you know what income and costs you have? If you are not up to date now, when will you be up to date?

 

Note: If you prefer to fill in a paper tax return, you have until 31st October to make sure it arrives with HMRC, otherwise it will have to be done on-line.

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Business Advice from Berkshire – What lessons have you learned?

Having exhibited at The Business Show at Olympia recently, it gave me the opportunity to speak with many business owners and would be business owners.

Two topics kept re-occurring. The first was that many accountants are not good at communicating with their clients and the other was that successful businesses keep a careful eye on their figures. I believe both the above to be true, but what I found interesting is the number of times I heard them being said to be over the two days of the show.

Penny WellingtonTaking the first point, difficulty in communication, what can be done to address this? If you go on holiday to a country where a different language is spoken, you know it makes sense to learn a few words even if only to be polite and be able to say thank you. The more vocabulary you learn, the easier it is for you and the natives. In many countries, the local population have learned English which means we can take the lazy approach and still be understood without having to put in too much effort. Is it possible to take this approach with your accountant? Learn a bit about their language and what they are doing and it will be much easier for both of you.

The second topic really leads on from the first. By taking an interest in the figures – and by this I don’t mean you actually have to do them – you can monitor the current position of the business and realistically plan for the future. Many business owners would like to be in this position, but expect to do so without learning the basics.

If you do decide to learn the language – and a bit about the culture – I can guarantee it will make a difference to your business. Remember Finance for Business Owners is one of the courses I offer. I also work with larger businesses where the Finance Director believes ‘nobody understands him’. This can be true as the MD is too afraid to ask questions in case he can’t understand the answer. A course in language and Book coverculture can mean everyone can get the most from their holiday – oops I mean work on shaping the business and growing the profits.

Get in touch to book a bespoke course, or for the dates of the classroom courses. Also share your own thoughts on your learnings.

Advice from Berkshire: Doing it is not as bad as you think!

What jobs do you have that you keep putting off? What will it take to make you do them?

All of us have something where the thought of doing it is worse than the act itself. Business owners often put off doing the tasks that they believe are not why they went into business. For some this may be as simple as changing the ink in the printer, for others it could be chasing outstanding invoices, for me it was raising my presence on the internet by putting videos on YouTube.

wconI knew it needed doing, some years ago I went on a very good course that showed me all the way through from researching what I should focus on, to filming, to uploading onto YouTube. I did one ‘film’, struggled with technology so put off doing any more. Earlier this year I did another to promote my book ‘Understanding Accounts for the UK Business Owner’ (www.understanding-accounts.co.uk) but then stalled again. I was happy with content, happy with filming but didn’t want to waste my time if I couldn’t upload it.

The truth is that technology has moved on over recent years. Uploading is easy. There are options to automatically resize, trim and other editor type tasks. Employing a professional is the best option, but I can now say I am prepared to have a go. I know what is needed and could give them the best chance to produce an excellent job, or I can do an adequate job for my purpose. Take a look at my latest Youtube offering here

Yes, you know what I am going to say next. Keeping your books of account up to date are just the same. The thought is worse than the deed. Doing it little and often means it is not that giant intimidating you and causing you to be like a rabbit in the headlights and stand there immobilised. Technology has moved on. If someone can show you what to do each week, and after several weeks you realise that it is not as bad as you thought, you can then keep doing it. You then start to see the fruits of your labour. Keeping on top of customer debts, planning your cash flow, seeing which activities within the business are bringing in the money and which are costing you. I was training a dentist last Friday and I suggested having a heading called ‘don’t know’ so if he met a bank payment he didn’t recognise he could park it and come back to it later rather than having an excuse to abandon his work.

Who will you choose to help you get started? Wellington Consulting offer private and very small group classes on Finance for the Business Owner. If you compare the cost of a course with the extra profits you can make as a result, you would be making a wise business decision to come along. Contact us at info@wcon.co.uk to book your place.

The courses are mostly held in Wokingham, but if you would like me to travel to you, I am happy to do so, providing you cover the costs. Yesterday I had an enquiry from Truro in Cornwall today I am in Croydon and tomorrow in London. Thursday I have a course in Wokingham and Friday I will be doing accounts work – and replying to emails. Further filming may have to wait till Saturday, but I now know that I can do it.