Preparing for the 24/25 tax year | 5 minute read
The 2023/24 tax year is coming to a close, here are some tips on how to prepare for the next one.
The tax year is made up of 12 months however it does not run from January to December like an ordinary year. Instead, the tax year begins and ends in April. The 2023/24 year will end on April 5th and the 24/25 tax year will begin on April 6th.
So, there are only a few days left to get your e-commerce business’s finances in order and prepare for the next one. There is a lot to think about in the run-up to a new tax year and this guide will mention our top tips to help you prepare and get your finances ready.
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How to prepare for the new tax year
There are many ways you can prepare your e-commerce store for the new tax year. For example, you can create an end of tax year checklist and speak to a specialist e-commerce accountant to ensure compliance with tax rules and regulations.
While preparing for the new tax year, remember to update personal information, gather any relevant and important financial documents for reference, review your tax return for the previous year and mark important tax deadlines for the year ahead.
Take any company dividends
Any dividends you wish to take from your company’s profits must be issued before the end of the current tax year to be recorded on your Self-Assessment submitted to HMRC. Paying dividends before the end of the tax year will maximise your tax efficiency and will allow profits to be extracted from the business without liability to tax.
In April 2023, the dividend allowance was reduced from £2000 to £1000. The allowance is expected to remain at the same rate in 2024/25.
Ensure all business records are up to date
To accurately distribute dividends, it is important all business records are up to date. You can only issue dividends from company profits after tax so it is important to get things right.
For businesses that use cloud-based accounting software such as Xero, this means ensuring all of your transactions have been uploaded and reconciled. Making sure that your accountants are in order before the end of the tax year allows you to enter the new tax year confident in your business finances.
If you are yet to adopt cloud-based accounting software for your e-commerce business, get in touch with us today to convert your old accounting and bookkeeping set-up to Xero.
Remember payroll deadlines and submissions
If your e-commerce business runs payroll, even if it is just for you as a single director or employee, you must remember to submit your final Full Payment Submission by April 5th. This is an HMRC Real Time Information requirement and failure to submit it on time could result in a fine.
Xero users can easily and simply file payroll information with HMRC to ensure 100 per cent compliance and reporting.
Make a note of the changes
In 2023, the Spring Budget statement announced some important changes.
In the 23/24 tax year, the government will be introduced some of these changes which could impact your business.
Before the end of the tax yea, we recommend you check and speak with an e-commerce accountant to discuss what the changes mean for you and your business.
National Insurance contribution threshold
In January 2024, National Insurance reverted back to its previous level before the recent 1.25 per cent hike. This means that National Insurance is now at 10%.
Capital gains allowance
Capital gains tax allowances were reduced from April 6th 2023. In the Autumn statement, the chancellor announced capital gains tax will be reduced from 2023 and further reduced in 2024. The current capital gains tax allowance of £12,300 is now halved to £6000 come the 24/25 tax year.
Corporation tax increase
In the upcoming tax year, your e-commerce business will pay 25 per cent corporation tax on its profits- up from 19 per cent.
It is important you understand these changes and have reflected them within your annual tax return before the new tax year.
Next steps
Get in touch with the expert accountants at Unicorn Accountancy to clear away any uncertainty you may be feeling.
With expert knowledge and experience, our accountants will help you understand the changes and what they mean for your business in addition to making sure your business is ready for the 24/25 tax year.
Why choose Unicorn Accounting?
Ensure you keep on top of your finances and tax obligations by outsourcing to an accountant. This means that you don’t need to worry about your end of year accounts, payroll, or bookkeeping requirements.
At Unicorn Accounting we are e-commerce accountants who help make your online business a growing success. We offer e-commerce accounting advice, financial management, bookkeeping, cash flow statement, and tax filing services to support and scale your business.
Our team of accountants and Xero-certified advisors have experience working with both small start-ups and family-run online stores to large-scale, international retail and e-commerce brands.
If you’ve got an online store, we have the best solution for you. Providing you with a financial arm to your business through our sector experience, and skills with innovative technologies. To see how we can help you maximise the scalability of your e-commerce brand all year round, get in touch with Unicorn Accounting today. Or click here to get a free quote.
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