What the End of the 2024-25 Tax Year Really Means for Your Business
As we approach the end of the tax year on 5 April, it’s easy to overlook the importance of wrapping things up properly. But don’t be fooled—it’s more than just a deadline for accountants. The end of the tax year is an opportunity for small business owners to take stock, tidy up their finances, and make moves that can help reduce tax liabilities or set you up for a smoother year ahead.
Here’s what the end of the tax year really means for your business—and what you can do now to make the process as painless as possible.
1. Wrap Up the Current Year Properly
First things first: You want to make sure everything is properly accounted for. Take the time to go over your income and expenses for the year, and make sure you haven’t missed anything important.
Receipts, expenses, and invoices: Check that all your income and expenses have been logged. This includes everyday items like office supplies, any business travel, subscriptions, and utilities. Every little detail counts.
Mileage and travel: If you’ve been using your car for business purposes, now’s the time to update your mileage records and ensure all travel expenses are in there.
VAT: If you’re VAT registered, this is the moment to double-check that your records are up to date for the next return. Make sure you’ve claimed VAT on all eligible expenses.
It’s easy to let things pile up throughout the year, but wrapping up the current year properly means you’ll have a clean slate going into the next one.
2. Make Smart Year-End Moves (Before 5 April)
The end of the tax year isn’t just about tidying up. There are also smart moves you can make now that could help you save on taxes or build your personal wealth.
Pension contributions: If you’re looking to reduce your tax liability, now is the time to make additional contributions to your pension. Not only does it benefit your future, but you can also take advantage of the tax relief available.
Capital allowances: If you’ve been thinking about upgrading your equipment, this is the time to buy. From computers to office furniture, purchasing now allows you to claim capital allowances against your current year profits.
ISAs: If you haven’t already, consider using this year’s ISA allowance. While this is more personal finance, it can help you build up tax-free savings in the long run.
Making these moves before 5 April will ensure you’re in the best position going into the new tax year, both financially and tax-wise.
3. Get Ahead of the Game for 2025-26
Don’t wait until the last minute to get ready for the next tax year. Now is the perfect time to prepare and get a head start on the next round of Self Assessment.
Keep documents: Instead of saving everything up for the end of the year, get into the habit of uploading receipts and filing paperwork as you go—it’ll save you hours later.
Review your pricing and budgeting: Take a hard look at your income and expenses over the last year. Are your prices still competitive? Are you budgeting enough for your taxes? Taking a moment to reassess will help you plan for a more profitable 2025.
Business structure: Has your business grown? Have your needs changed? This might be a good time to assess whether your current business structure is still right for you. This can have tax and legal implications, so it’s worth a second look.
The earlier you start, the more time you’ll have to make informed decisions and prepare accordingly.
4. Avoid Common Mistakes
At this time of year, some mistakes are all too common. Here are a few to avoid:
Assuming you have until January to worry about taxes: While the tax return deadline might be in January, don’t leave it until the last minute. You’ll thank yourself later if you’ve already got everything sorted out.
Forgetting payments on account: If your tax bill was over £1,000 last year, you’ll need to make payments on account for the current year. Make sure you’re aware of when these are due and budget accordingly.
Not budgeting for your tax bill: One of the most common errors is not putting aside enough money to cover your tax bill. Make it a habit to set aside a percentage of your income each month, so you’re not caught off guard.
Being aware of these pitfalls can help you avoid unnecessary stress and ensure that your finances stay on track.
5. Take a Moment to Reflect
Finally, take a moment to step back and reflect. What worked this year? What didn’t? Was your business profitable enough, or did you struggle with cash flow?
This is a good time to evaluate whether your financial systems are supporting your goals, or whether there are changes you could make to improve the way you manage money. A little reflection now can help you set clearer financial goals for the coming year and beyond.
So, What’s Next?
The end of the tax year might seem like a stressful time, but it doesn’t have to be. By taking a few simple steps now—whether it’s organising your receipts, reviewing your business structure, or making some smart year-end financial moves—you can set yourself up for a less stressful year ahead.
Start with just one thing this week—whether it’s reviewing your receipts or booking some time with your accountant. If you’d like a hand, just get in touch—we’d be happy to help.