We’re 8 days away from the due date for submitting the CT1
If you’ve never done one before, you’re probably wondering what’s the best way to estimate your Tax Bill for November and December. If it’s only your first or second year in business it’s probably a worry, especially if you can’t afford an Accountant to do it for you. Use this guide to preparing an Income and Expenditure Account to estimate your November and December numbers.
Step 1: Make sure you’ve got everything posted for the year so far, including October items as much as possible. You may be able to request some bills early. If not just estimate them.
Step 2: Export your Accounts for the year to date from your Accounts Software to an Excel Spreadsheet.
Step 3: Get a total Income (cash received) for the year to date, month by month, by category.
Step 4: Get a total of Expenditure (cash paid out) for the year to date. month by month, by category.
Step 5: Add in any item you’re aware of, but could not post into your Accounts System for lack of a bill etc.
Use a template like this to keep track, and do the sums for you:
Step 6: Income: Take a look at the trends across across Income. If the numbers don’t fluctuate too much, use the whole 10 months to work out an average per month. If you notice a steady increase or decrease in the last three or more months, use those months to work out an average. You can do both and compare if you wish. Use the average you decide is best as your figure for November.
Step 7 : Do step 6 above again, but use Jan-Nov or Sep-Nov etc to estimate your December number. You can ignore this step if you feel November and December will be around the same
Step 8: Expenditure: Fill in any fixed Expenditure you are aware of for October, November and December. Estimate anything else, such as heating, taking into account the time of year (what months you are paying for)
Step 8: Check your numbers.
Step 9: Get someone else to check the numbers for you. They might spot something you haven’t.
Remember, it’s better to overestimate than underestimate. Once submitted, adjustments can’t be made to this year’s return. You have to wait until the following years return to adjust for this year. You may be penalised for your mistake with an interest charge. Ouch!
Step 10: Complete your CT1 Tax Return.
This guide assumes your Accounting Year is Jan 1st to Dec 31st
We love to share! So here’s the template we designed: Bullet’s Template for Income And Expenditure Account and Cash Budget all yours for free. If you need more info on it, drop us a mail: email@example.com