Here’s what you need to do by 5th April 2019
March, 11 2019
If you’re in the accounting department or own a business, it’s likely that the 5th April is a date that’s playing on your mind. We’ve rounded up the key things you need to do by the deadline.
5th April 2019 marks the official end of the tax year. It started on the 6th April 2018 and now it’s time to make sure you’ve got everything in order from the past 12 months. This is the perfect opportunity to maximise your tax efficiency and get up to speed with any changes for the new year.
This is what you need to do by 5th April
We’ve rounded up the basic tasks you need to complete by the end of the tax year. Whether you’re a sole trader or run a limited company, it’s worth knowing what is required of you and what you can to benefit your business, too. Don’t forget to share this around to help your friends and family!
Update all your records
This should be a no-brainer, really. And for the following tasks, it’ll probably help to make sure all your records are up-to-date, especially when paying dividends. You need to be at a point where you (or your accountant) can accurately assess your company’s financial position – accounting for all expenses, salaries, complete invoices and pension contributions.
For tax efficiency, you must issue all dividends before the 5th April so that they can be included in your 2018/19 self-assessment. Remember, there are three rates for taxing dividends: basic, higher and additional. The tax-free allowance for dividends remains at £2,000 whilst personal income allowance will go up from £11,850 to £12,500 in the next tax year. You can find more information about the tax rates on paying dividends as a limited company here.
Submit your payroll
Along with your dividends, you must also submit your FPS (Final Payment Submission) to HMRC by 5th April 2019. This is really important and could result in a £100 fine if you miss the deadline! Even businesses with just one employee must submit their FPS – you can record the final payroll amount by the 6th March as this will be your last month of the 2018/19 tax year. Get more information from the government website on submitting payroll.
Make pension contributions
The most important thing to remember for the end of a tax year is to maximise your pension contributions. As a business owner, you should ensure your final pension contributions are submitted to your provider by the 5th. It’s much more tax-efficient to pay through your limited company if possible. Also, try and pay in lump sums periodically or into your monthly payroll for the best outcome. In terms of tax-free amounts, you can contribute £40,000 per year and the government will provide a 20% tax relief.
Check your ISA allowance
If you own an ISA or are thinking about it, now is the time to start looking at making some payments. There may be limits on what you can pay in each tax year so check your investments before 5th April.
Tick off year-end checklist
Many companies may choose to have their individual ‘year-end’ towards the end of the tax year, just to make things convenient and organised. If this is you, then work through our year-end checklist to ensure you’ve done everything you need to as a limited company. Don’t worry if it’s your first year as a director, you’ll soon get to grips with the tasks at hand once you’ve completed them for the first time.
Note any new changes
Every tax year the government may introduce some changes surrounding business and personal accounts and finances. So, you should always read up on what to expect to avoid any surprise in the next tax year! From 6th April 2019, there will be some important changes. These are as follows:
- Personal allowance increases to £12,500
- Higher Rate tax increases to £50,000
- National Minimum Wage and Living Wage increase slightly
- The benefit in kind tax rates increase for company cars depending on CO2 emissions
- Student loan repayment thresholds increase
- Capital Gains tax increases to £12,000
Worried about organising your company’s finances for the new tax year? Or just simply need some advice on how to improve your processes? Sign up to Quant today to streamline your entire accounting system, access it all online and speak to our expert advisors whenever you need a hand. Enter the new tax year with peace of mind!