Staying ahead of the tax man
If there’s one thing everyone in business agrees on, it’s that nobody likes to discover they owe a big end-of-year tax bill. It’s a shame to hear stories of people who haven’t been paying any attention to their business numbers, only to discover that they’ve been lumped with unexpected end-of-year taxes once their accountants have completed their books. Not planning for this can put real strain on your cash flow and potentially put you out of business. Staying ahead of the game and planning for your taxes is absolutely essential.
We recommend that clients set aside money throughout the year for tax. This can involve transferring GST due on a regular basis into a dedicated GST/Tax savings account. If you’re using accountancy software, you can check your GST liability anytime.
It’s also a good idea to regularly put aside a percentage of your net profit for income and student loan payments. We can help you work out this percentage to ensure it’s accurate for your business.
If you’re not familiar with cash flow forecasting, spend some time identifying when your business experiences periods of high and low revenue, so you can work out when you’ll need to make larger contributions during the profitable periods. This may be structured around seasonal peaks within your business.
Provisional tax has long been a thorn in the side of many business owners but we can look at alternative payment options for you, rather than have you pay using standard provisional tax methods.