This article was updated on 9 April 2021
The new tax year started on 6 April, and the good news is that some allowance changes may help you save money.
And after what's been a challenging year for everyone, not least small business owners, we wanted to share some tips that might help you save money or even reduce your costs as the country begins to emerge from lockdown.
It’s the new financial year, which means there’s been a number of tax allowance changes. As some of these help you keep more of your hard-earned money, we thought we’d run through 10 further ways the self-employed can cut costs, saving money (and time) this financial year.
Use the tips in this article as a guide and be sure to speak to a professional before making any key decisions with your finances.
The online Self Assessment deadline for 2020-21 isn’t until January 2022, but to get as many deductions from future tax bills as possible, you should have your tax return in the back of your mind all year round.
It pays to keep a detailed record of all your allowable expenses so that nothing slips through the net when you fill in your next tax return.
Not sure what you can claim for? Here’s a list of allowable expenses you could claim for.
And there are apps that make keeping track of your receipts a breeze. Take a look at some of the best accounting software available for small businesses.
If you’re in a position to put money away into a savings account you get tax allowances for the interest you receive.
For example, most people have a Personal Savings Allowance of up to £1,000, depending on the tax band they’re in. This is the amount of interest you get to earn tax-free:
Although interest rates are at a record low for high-street personal current and regular savings accounts, keep in mind that banks often give incentives like cash or vouchers to switch to them.
Credit cards can be a tempting option, especially if you’re in a bit of a financial squeeze, but using your personal card for business purposes can quickly lead to costly fines.
If you need a credit card for business expenses, look into getting one specifically for that purpose. And if you need financial help to launch your business, consider researching available business loans.
You could also look at your business bank current account to see if you’re still getting the best service possible. Check out the best business bank accounts here – some banks offer (time-limited) fee-free banking for switchers.
This goes for both business and personal use, but it’s worth seeing if there are better deals available, especially if you’ve been with the same provider for a long time.
It’s also worth re-evaluating whether the type of package you have is right for your needs. If you find you’re often going over your call or data allowance, but rarely get through all your texts, for example, you could be costing yourself more in the long run than if you went for a plan with fewer texts but more data and minutes.
Many companies these days will offer you benefits if you refer other customers to them, whether it’s money off your next order, free giveaways or simply some cashback to say thank you. It’s a great way to get extra out of something you’re already using and enjoying.
If you’ve found a product or service that you like, spreading the word can work out for you both. At Simply Business, we have our own refer a friend scheme – if you’re a Simply Business customer we’ll give you a £50 gift card for every friend you refer to us. Your friend will get a £25 gift card, too.
Although all but essential travel has been at a stand still for the past few months, things are starting to pick up again. So whether you’re driving or taking public transport, travel can quickly get expensive, both for business and leisure.
If you take the train, look into whether a season ticket is best for your needs, or whether you’re eligible for a railcard. They’re available for both younger and older business owners, as well as those with disabilities.
If you don't take the train that often, planning far in advance will allow you to book advance tickets, which often work out far more cost effective than buying on the day.
And if you drive a lot, and your car or van guzzles petrol or is always in need of a service, it might be time to invest in a new one. You should also keep track of your mileage, as this can be claimed back against your tax return.
For many, insurance is a key part of running a business, and the costs of operating without it can be severe. If you employ any staff, even on a casual basis, you’re legally obliged to have employers’ liability insurance, and there is a range of other types of insurance that can help cover the costs of mistakes, accidents, loss, theft, and damage.
Even if you already have insurance, it’s important you check you have the right cover in place. You might have made some changes to your business since you last renewed, and going over your policy wording to ensure it still covers everything you expect it to is a good idea.
At Simply Business, you can get a tailored business insurance policy, choosing which covers you need and which covers you don't. It's quick to compare quotes from a range of leading insurers – you could have your policy in minutes.
We’ve all done it – signed up for a service that we’ve stopped using and forgotten we’re still paying for. Take the opportunity to check all your direct debits and see if there’s anything there you no longer need.
And if you use subscription services like Spotify or Netflix, consider whether the ad-free experience is worth the extra money, or whether you still need to be able to watch on four screens simultaneously. Downgrading to a package with fewer features, while still keeping the service, can save you a lot in the long run.
Although the best way to cut spending is to avoid buying anything, sometimes you can't escape it. You might need to replace something in your home, for instance if your kettle breaks, so it's a good idea shop around and get the best deal.
There are sites out there that allow you to take advantage of cashback, TopCashback and Quidco being two of the most prominent. If you browse deals using their sites, then use the links provided to purchase goods and services online, they’ll give you a cash bonus.
It’s worth being a little cautious when using these sites, as you may find better deals elsewhere, even with the cashback factored in. There are still great deals to be had, though, so if you’re looking to buy online, these can be a great way to cut your costs back.
Many companies have customer rewards or loyalty schemes, from the giants like Nectar to even the smallest of small businesses. Opting for retailers and service providers who give you that little bit extra can help make a difference over time.
And this works both ways. Setting up your own loyalty scheme can help retain customers and bring more money into your business. Read our article on customer loyalty strategies to find out more.
How do you take care of the pennies? Share your best money saving tips in the comments.
We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer
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