Are you prepared for the end of the tax year?

As the new tax year approaches, read our 10 top tips for managing this important paperwork period - stress-free.

The current tax year ends on 5 April 2024, so there's still plenty of time to get your books in order. 

What is the tax year-end, and how does this affect your business? 

The tax (or financial) year runs until 5 April 2024 and is the period when new government taxation often goes ‘live’ following previous budget announcements.

It’s the time to look back and take stock of your previous year’s finances, before looking ahead to the upcoming year.

To help you with your year-end review, we’ve put together 10 top tips that will ensure you have all bases covered. 

1. Make sure your accounts are up to date 

As well as being a legal necessity, accurate and timely reporting of your balance sheet is crucial to ensure you optimise your year-end accounts.

For example, make sure you have reconciled all your pension contributions, sales invoices, expenses and employee salaries with recorded transactions.  

You should only ever pay dividends from profits earned and be sure to issue these after corporation tax has been accounted for.  

2. Time is money 

You will notice a theme appearing in this list – time is literally money.

This is because there are penalties for not filing any legally required information, which you will eventually have to pay.  

Think about it all early and decide whether you’re going to go solo or hire an expert accountant – but don’t procrastinate and put things off. 

3. Find the right bookkeeper or accountant for your industry 

Every industry has its own nuanced costs, benefits and tax reliefs.

So, employing an accountant who is familiar with, or ideally an expert in, your industry will help you make the best of your year-end review.  

4. Safeguard cash balances 

A higher cash balance will be viewed positively by credit agencies, so hold off paying suppliers or invoices until you absolutely have to during the year-end period.

At the same time, make sure all monies owed are gathered and chased up to bolster your available cash.  

5. Process employee bonuses and expenses 

You’ll want to make sure all employee bonuses and expenses are paid prior to the end of the tax year, otherwise you’ll have outstanding payments moving into the next financial year.

This could then affect your profits and dividends for the following year as you’ll have to account for them then, in addition to that year’s bonuses.  

6. Contact existing clients to thank them 

The end of the tax year is the perfect opportunity to contact your existing clients and engage with them.

Give a round-up of business highlights and thank them for their custom. You could also use this as a chance to cross-sell by communicating your specialisms. 

Using an eCRM will help you organise your contact database and send professional-looking emails.

You can segment your clients, for example, by interest, where the lead came from or countless demographic or geographic conditions.

Automatically insert your clients’ names into email greetings and measure the subsequent click-through rate (CTR) to your website. 

The more personalised the message, the more your clients will feel engaged. 

7. Set budgets for the following financial year 

Depending on how long your business has been operational, you should have enough data to enable you to set budgets for the upcoming financial year.  

Looking at your previous year's balance sheet should allow you to plot high or low seasons, see how campaigns performed and compare investments against outcomes and objectives.

For example, an ice cream maker may quickly see, when reviewing their previous year’s finances, that the summer months show higher revenue than when it's colder.  

Entertainment brands, for example, might see peaks in sales at weekends when customers have more time to spend browsing.

They may then choose to increase their advertising budget during these times to maximise exposure. 

8. Review accounting software and GDPR compliance 

If you’re not using an accountant and are attempting to do your year-end accounts by yourself, you may wish to review your software and take the opportunity to check your data is still GDPR compliant. 

There is software that can automate a large amount of what is required for year-end reporting, pulling in in-goings and outgoings, calculating tax and making the year-end process a less frustrating time. 

GDPR mismanagement can also cause unnecessary headaches, so this is the time to check that all data is held securely and used only for the purpose that was intended.  

9. Optimise your personal tax allowances 

Tax allowances are there to be used, so make sure you are aware of what is available based on your own personal circumstances.

Maximise your pension contribution and consider any tax relief in terms of capital gains tax and ISAs.  

Better still, choose a knowledgeable accountant who will help make sure you optimise your personal tax allowance and prepare correctly for the following year’s accounting. 

10. Don’t miss the deadline! 

It is essential to ensure that your year-end figures have been completed on time and are accurate and complete.

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