As a new tax year approaches, business owners need to prepare their payroll and ensure compliance with the latest tax laws and regulations.
April is also an excellent time for businesses to review their financial situation, identify areas for improvement, and plan ahead.
Here are some essential tasks for the start of the new tax year:
- Review and update employee information
Before the start of the new tax year, business owners should review and update employee information, such as contact details, pay rates, and tax codes. This will ensure that the payroll is accurate and up-to-date.
- Check tax codes
HM Revenue and Customs updates tax codes annually, and business owners must ensure that the correct tax code is used for each employee. This can affect the amount of tax deducted from their pay, so it’s essential to review this information carefully.
- Check for changes in National Insurance contributions
The National Insurance contribution rates and thresholds change every year, so it’s important to check these and ensure that the correct amounts are deducted from employees’ pay.
- Review pension contributions
Employers are required to make pension contributions on behalf of their employees, and these rates can change from year to year. It’s essential to review and update the pension contributions to ensure compliance with the latest regulations.
- Complete payroll year-end tasks
Before the start of the new tax year, business owners need to complete payroll year-end tasks, such as issuing P60s to employees and submitting the final Full Payment Submission (FPS) to HMRC.
It’s also an excellent time for business owners to review their financial situation, identify areas for improvement, and plan ahead. Here are some essential steps business owners should take at the start of the new tax year.
- Review and update financial records
Take the opportunity to review and update financial records, including income and expenses, bank statements, receipts, and invoices. Keeping accurate financial records is crucial for meeting tax obligations and making informed business decisions.
- Set financial goals and budgets
Business owners should use the start of the new tax year to set financial goals and budgets for the coming year. This could include revenue targets, expense reductions, or investment plans. Having clear financial goals and budgets can help business owners make informed decisions about spending, pricing and investment.
- Understand tax changes
Each new tax year brings changes to tax laws and regulations. Business owners should familiarise themselves with any tax changes that may affect their business, such as changes to tax rates, allowances, or deductions. Seeking advice from a tax professional can help ensure that businesses are fully compliant with tax laws and regulations.
- Plan for pension contributions
The new tax year is also an excellent time to plan for pension contributions. Business owners should consider whether they are making the maximum contributions possible and whether there are any changes to contribution limits or tax relief. Pensions are an essential aspect of retirement planning, and ensuring adequate contributions are made can provide future security.
The start of April is a pivotal time of the year for business owners. Just as individuals make new year resolutions on January 1, companies can make their own resolutions on April 6.
- If you need any help with planning for a new tax year, get in touch and we will help.