Got my tax bill from my accountant this week and realised instantly that i havnt saved enough for what the amount was.
I dont know how ive got this wrong. My method was to try and save 20% of profit and that should roughly cover it, give or take.
I spoke to my accountant about it who said that ive got til Jan to get the amount. Its not alot really but i thought from April onwards i am supposed to be saving for next years tax bill? Not still trying to get last years amount?
My accountant said this happens a hell of alot. But i always try and be as efficient as possible.
So if, ive got it right, now i will be saving for next years tax bill as well as finding the amount i owe for the previous year.
My main question is. What method do you use for saving for tax? Do you save a % of turnover or profit? And do you save an amount as a back up fund, incase anything goes wrong or you need to pay out a large amount?
I think i know roughly where ive gone wrong. I bought a couple of large bits of equipment, and i know this will recoup in the account over time. But im now thinking i should have had a back up fund to buy such items.
One to remember Steve is that, if you pay tax out of the business eg 5K this year you will have to pay tax on that 5K next year, as well as your drawings....
I do the same Brian. Last year i had quite a few large business purchases so my tax bill was alot less. Eg, newer van etc
This year ive not had many large purchases so there wasnt much to claim back on. Which is where part the problem has come from.
I think im going to increase the amount i save from 20% to 30% so that i can have a back up fund.
I like the idea of paying monthly Brian. Is this a nationwide service or just a service for people of Scotland?
Perhaps i will do some research on this one. Have you set this up yet?