Welcome back to my blog! This time, I will be discussing the most common questions I get asked as an accountant. There are three main questions that I get asked by my clients, including: How can I reduce my tax liability? How can I track my business expenses and income? What happens if HMRC contact me?
I will go into more detail, but I want to clarify one point. As an accountant, I want to make sure you pay the right amount of tax. There is no secret solution to reducing your tax liability. What we do is maximise what you can claim as a business and personally. That may come from allowances or allowable expenses.
Let’s get started…
How Can I Reduce My Tax Liability?
To reduce your tax liability, there are two key factors:
- Utilising all available allowances, such as working from home or laundry. Some may not be applicable, but we will apply allowances where we can.
- Tracking and applying all applicable business expenses to your tax return. It is important that you keep an accurate record of your business expenses. If you are ever unsure, contact your accountant to find out what you can and cannot claim for.
How Should I Organise My Business Expenses?
My response here is either software or Excel. The ideal solution is accounting software because expenses and income can be tracked on the go. However, there is a cost to software, which may not be justified, making Excel an excellent alternative. Whatever you choose, you should keep the incomes and outgoings clear for both yourself and your accountant, so they can analyse it and the year-end or tax return can be completed accurately and efficiently. Always go with your preferred method, because this will make your life less stressful.
What Should I Do If HMRC Contact Me?
First and foremost – don’t panic! If you have an accountant, pass any communication onto them so that they can help understand if there is an issue. Sometimes, there may be a simple solution that can be dealt with quickly. If it’s more complicated, you can ask your accountant to deal with it on your behalf. They would need to apply for agent access, but this will relieve some of your stress. Generally, I find HMRC very good to deal with. I have never had an issue with them, and I find them supportive as long as I am clear with them and provide them with what they need in a timely manner.
I hope this has answered some of your key questions, but if there’s anything else you’d like to know, feel free to get in touch! Whether you need help with tax planning, business finances, or dealing with HMRC, I’m here to make the process as stress-free as possible.
