Chris Wilkins says there's still time to start saving tax
Slumdog Millionaire or Slumdog? Rolls Royce tastes with Ford Fiesta income? Forget about lavish lifestyles, 2009 will be a year of survival mode. Banish the luxuries, batten down the hatches and survive! As my old lecturer used to say, turnover is vanity, profit is sanity but cash is king!
January was the deadline for filing your 2008 tax return. If you have missed out on valuable concessions, you may still have time to revise your tax return. There's still time to save. Here's just one case study, please visit www.timeandleisure.co.uk for other examples of concessions.
Mr Canal
Mr Canal had a thriving building business, which was a partnership with Mr Longshore. All went well up to the end of 2007 when they had bumper profits. However, 2008 was a disastrous year with lots of customers deciding not to follow through with their orders due to the credit crunch. Mr Canal and Mr Longshore visited their accountant who told them that the tax payments that they made on 31st January 2009 include the balance of the tax that they owe for the tax year ended 5th April 2008 (which is based on their profits for the year ended 31st December 2007) plus their first payment on account for the tax year ended 5th April 2009 (which is also based on their profits for 2007). Obviously this badly affects their cashflow.
However, you can make a claim to reduce the payment-on-account element of the tax payment due on 31st January 2009 and also 31st July 2009 to your actual profits for the year ended 31st December 2008, when profits would be a lot lower.
So all is not lost. Dust off the calculator and start saving tax!
Chris Wilkins FCCA is a Chartered Certified Accountant, Registered Auditor and the managing partner of Wilkins Southworth based in Barnes.
Call Wilkins Southworth and speak to Chris Wilkins on 020 8878 3949