With the COVID-19 pandemic still a huge concern for many business owners, it’s imperative that you stay tax-compliant in these turbulent times.
This can be a challenge, but it’s important to stay on top of your taxes so you don’t face any penalties or fines down the road. You should also analyse how the pandemic has affected your business and how to report any COVID-19 expenses or losses. It can all be a lot to manage, but the good thing is that with a little bit of preparation and planning, staying compliant isn’t difficult at all.
Here are some ways to stay tax-compliant during the COVID-19 pandemic.
Keep Track of All Business Income and Expenses
To ensure accuracy in your taxes, it’s important to keep track of all business income and expenses. First, mark the tax deadline on your calendar, then begin recording all of your business income and expenses following that date. At the end of the year, pull out the tax documentation for those months to find your total income and total deductions before you prepare your tax return. If you’re not sure about the process, get professional advice or consult with a tax advisor.
Make Sure You Have a Qualified Tax Accountant
Tax planning and preparation can be difficult, especially with the pressure of the tax season. The COVID-19 pandemic has made it even more challenging to stay on top of all the new laws and legislation that may affect your taxes in 2019 and 2020. That’s why it’s so important to have a qualified tax accountant on hand for any questions or concerns you may have. Don’t risk being unprepared. A tax expert will be able to help you stay on top of your taxes without having to spend hours researching the latest information.
Stay Current on Any Changes in the Tax Laws
COVID-19 has affected many businesses’ tax returns this year due to losses and reduced income as they dealt with the virus. Businesses that have not filed a return may be subject to penalties and fines for failure-to-file or late filing of tax returns. It’s important to stay up to date on any changes in tax laws because they will directly affect your business’s tax return. Don’t forget about filing the appropriate tax forms by the correct filing deadlines.
File for an Extension, if Necessary
If you owe taxes, but can’t pay them when they’re due because of the virus’ impact on your finances (or other extenuating circumstances), then it’s important to file for an extension. This will provide you with more time to pay your taxes without incurring any penalties or late charges. An extension can be granted if the pandemic made it difficult for you to work, or if you missed days at work, for example. Keep in mind that extensions aren’t always granted, so plan ahead.
Take Advantage of Tax Incentives and Other Benefits
During the COVID-19 pandemic, the UK government put many tax incentives and benefits in place to help businesses cope. These include a National Insurance Reduction for businesses with 50 or fewer employees, the UK Emergency COVID Prevention Fund that offers grants and loans to small businesses for the purchase of equipment, emergency supplies and training, and more. Take advantage of these tax incentives and other benefits to help your business stay in compliance.
Ensure Your Business Always Meets Its Tax Obligations
As a business owner, it’s your responsibility to ensure that your company is always compliant with all legal tax obligations. COVID-19 has created additional challenges for many businesses as some owners have been forced to focus on managing their employees rather than paying taxes or filing returns. To help you stay on top of these responsibilities in light of COVID-19, consult a tax professional for assistance.