Smart Cashflow Planning for the Year Ahead
For many self-employed workers, this time of year brings dread as their personal tax payments fall due. Despite practical advice to budget throughout the year, many still find themselves struggling to pay. To get ahead for the coming financial year, leading payroll company, BoostPay, provides simple steps to take the stress out of paying your tax bill.
BoostPay Managing Director, Eileen Breeze shares her expert advice on making the year ahead financially seamless. Providing advice to navigate the difficult balancing act of managing cashflow with the daily pressures of running your own business, Eileen provides valuable insights and guidance to help workers thrive in 2024.
“Gaining control of your cashflow and tax payments is a crucial step to unlocking growth for self-employed workers and small business owners. By following my step-by-step guide, workers can confidently plan their path to success.”
With her vast experience and knowledge, Eileen shares simple steps to help workers behind on their current payments, and those looking to better plan for the year ahead. From open dialogue with HMRC to smart use of business credit cards, read on for Eileen’s guide to stress-free tax payments and unlocking your cashflow!
Step 1: Talk to HMRC
The first step to effectively manage your personal tax payments, is to create an open dialogue with HMRC. Whilst it can be tempting to put your head in the sand if you fall behind with payments, talking things through with HMRC should always be your first option.
Making a ‘Time to Pay’ arrangement with them is a simple, effective way to relieve immediate pressures and gives you space to plan.
Step 2: Create Space to Breathe
Nobody’s business journey is without it’s challenges. And if your business is growing, personal and business cashflow can be one of the hardest to manage. Itemising and assessing all of your business and personal outgoings can help you identify any costs you can delay or remove entirely. Asking a friend or mentor to help with this process is a great way to help you to review your spending objectively.
The golden rule if you defer any payments, is to ensure that you don’t accrue larger interest payments on things like credit cards than you would with a ‘Time to Pay’ plan with HMRC.
Step 3: Find a Flexible Friend
One of the simplest ways of spreading your costs is through smart use of business credit cards. Many cards charge no fees and provide an easy route to an extra 30 days or more payment terms before you start adding interest payments.
Newer companies can find themselves restricted to low limits, however these soon increase with timely payment of your monthly bill. This means planning ahead and using your credit card now, will lead to a higher limit, if and when you need it.
Best of all, many business credit cards will provide you with cashback or member loyalty points for every pound you spend.
Step 4: Target Non-Vatable Costs
Business credit cards are a simple way to spread payments, but it’s often not possible to pay your biggest costs like staff wages and contractor fees. This can be a major headache for self-employed workers with few other bills to pay. However, specialist payroll companies now offer flexible payment solutions that allow you to use business credit cards to pay your non-vatable costs.
“Spreading non-vatable business expenses like payroll has previously been out of reach for many entrepreneurs,” says Eileen. “Now with BoostPay it’s as simple as single credit card payment, that gives business owners up to 54 day payment terms and best of all you can still collect loyalty points for each £ you spend.”
Step 5: Tap to Pay Your Personal Tax Bill
The final major cost faced by self-employed workers is their tax bill. Whilst the due date for tax payments is predictable, a lack of budgeting or an unwelcome surprise in their year end accounts, can leave many short of funds. Providing welcome relief, self-employed workers and business owners can now settle their personal tax bill with their business credit card via the BoostPay payment process, providing both space to pay and loyalty points on every £ spent.
“Paying a personal tax bill has long been a time to dread for self-employed workers however it really needn’t be. There is now a range of flexible, easy to use options that workers can access that provide total compliance with HMRC legislation, flexibility on payment terms and even loyalty points back!”