Why the new tax year can be the ideal time to start a business

You’ve defined your big idea, nailed down your business plan and now you’re raring to go. But when is a good time of year to start a new business? If you want to be clever about it, for certain types of businesses, the start of the new tax year could be the ideal time. Here’s why. 

Give your business a neat and tidy start

In the UK, the tax year (aka fiscal year) runs from 6th April to 5th April the following year. If you’re going to run your business as a sole trader or a partnership, or you’re starting to rent out properties as an unincorporated landlord, very soon that will be the 12-month period that you’ll prepare your accounts for and include when you submit your Self Assessment tax return (which is due on 31st January every year). So aligning your business’s accounting year with the tax year is often the easiest way to keep your bookkeeping in logical order. 

As you’re probably picking up on already, there are some important dates that you’ll need to keep track of as a business owner. But fret not! Here’s a handy accounting calendar of key tax dates and deadlines to help get your head around them all.

Save your valuable time

There’s a lot on your plate when you’re starting up a business, so any opportunity to make your life easier and save some time is welcome. If your business is a sole trade or partnership, the first day you start trading (i.e. when you make your first sale or start working on your first project) is considered your business's start date - think of it like a birthday. If you wait to start trading until after 6th April, you’ll benefit from being able to wait a whole year before you need to file your first tax return - that’s assuming you don't already need to file one for other income you need to declare to HMRC.

But there’s more. Accounting software like FreeAgent can save you even more time by unburdening you of a lot of your accounting admin. For example, if you’re a sole trader or limited company director, as you go about running your business, FreeAgent works away in the background to calculate your Self Assessment liability - giving you a real-time view of how much you owe throughout the year. Then, when you’re ready to file, hey presto, FreeAgent will auto-fill much of your tax returns and forms for you! 

If you’d like to give FreeAgent a try, sign up for a 30-day free trial and check out this webinar to help you get started in time for the new tax year.