Five things to do before the end of the tax year - Finance for Photographers
The end of the tax year is approaching on 5th April 2017. If you are self-employed, or if your limited company follows the standard tax year, then you should be aware of this deadline and what it means for your photography business. To help you prepare, here are my top five things to do before 5th April 2017:
Do you wish to make any additional purchases in the current tax year? If you'd like to claim the relevant tax deduction this year rather than next year, then now is the time to make the purchase. Likewise, if you are thinking about buying something shortly, consider if you'd be financially better off to wait until after 5th April 2017 and claim the tax deduction against next year's income. If you are self-employed and follow cash basis accounting, then you must account for your income and expenses on the date that the cash enters or leaves your business. Bear this in mind when recording your transactions around the year-end date of 5th April, to make sure you book them into the correct financial year. You can read more about cash basis accounting on the GOV.UK website here.
You'll start off the new tax year on a much stronger financial footing if your accounts for last year are up to date. Not only will this help you plan better for the forthcoming year, but it will mean you don't have the task looming over you during the busier summer season. Planning this into your schedule before 5th April 2017 will help you feel more organised and in control of your business. If you're yet to get started on recording your transactions, or need a way to stay more organised, you can download my free income and expenses tracker for Microsoft Excel here. This download also includes my publication 'Cost Control for Photographers, Part 1', which details how to record your income and expenses.
What do you project for your business in 2017-2018? How much will you grow your revenue by and can you further reduce your costs? Do you envisage your revenue being seasonal, with some busy months and some quieter months? Making a budget ahead of time will help you to define your goals and give you a better chance of sticking to them. Use last year's completed accounting records (which you've now already completed as a result of point 2 above!) as a basis for budgeting the forthcoming year, making adjustments where you see necessary. If you'd like more information on how to set a budget for your photography business, drop by and say hello in my Finance For Photographers Facebook group, or get in touch via my contact form on this website.
The deadline for completing your tax self-assessment if you are self-employed is 31 October 2017 for paper submissions, and 31 January 2018 for online submissions - but just because the deadline is months away does not mean that you should leave it this long. By completing your tax return you might learn something in the process that will help you with your finances for the future - the sooner you discover these gems of information the better! Also, if you leave it to the last day, any tax payable will also be due immediately (31 January 2018). By completing your tax return sooner you will be better aware of your potential liability and able to plan your payments into your cash flow.
Are you new to business and yet to register with HMRC? If you are self-employed, then you must register by 5th October following the end of the tax year you need to send a tax return. Whilst this means there is no immediate rush, completing your registration sooner rather than later will help keep you organised with your financial matters. The process is quick and can be completed online. You can read more about registering your business for the first time on the GOV.UK website here.
To ask me a finance related question, please join me in my Facebook group 'Finance for Photographers'.