The financial landscape is always changing, and as a business owner, keeping up with your tax obligations is crucial. Provisional tax, in particular, can be tricky to navigate.
At Business Advisory Services, we’re here to guide you through the complexities of provisional tax for the financial year ending 31 March 2025 (FY25).
In this article, you’ll discover practical strategies to maximise cash flow and make informed tax decisions – all while keeping your business thriving!
Keep Your Cash Flow Strong with Provisional Tax Insights
Managing provisional tax payments efficiently is all about balance – between your tax obligations and keeping cash available for growth. Here’s a breakdown of the key points you need to know for FY25.
Understanding Provisional Tax
The first instalment for FY25, due on 28th August 2024, was typically calculated based on your previous year’s profits (either FY23 or FY24). However, historical profits don’t always match current realities. This is where proactive planning can make a big difference.
Why Up-to-Date Accounts Matter
If your FY24 accounts are finalised, your provisional tax will be based on those numbers. If not, the calculation will default to your FY23 profits with an uplift to account for growth. Ensuring your accounts are current will help you avoid unnecessary tax burdens.
Make Smarter Tax Decisions with Our Help
To avoid unexpected tax bills or overpayments, staying on top of your current year’s profitability is essential. Here’s how we can help:
- Optimise Your Cash Flow: If your current profits are lower, you could delay provisional tax payments and use tax pooling later in the year. This approach frees up cash to invest back into your business while still meeting tax obligations.
- Adjust to Changes: Have you moved to PAYE salaries or undergone significant changes? You may not need to pay provisional tax at all. We can help determine the most efficient path forward for your unique business situation.
>> RELATED ARTICLE: Unpaid Tax – Is IRD an ally or adversary?
Take Control of Your Tax Strategy for FY25
Provisional tax is paid in three instalments, so it’s important to reassess your financial performance throughout the year. Our team will ensure that you’re paying only what’s necessary and adjusting your tax plan based on current profitability.
Why Work with Business Advisory Services?
Tax reminders are helpful, but they won’t keep your cash flow optimised. That’s where our tailored services make the difference:
- Tailored Compliance Package: We review your tax obligations at each instalment (August, January, May) to ensure you only pay what’s necessary.
- Smart Cash Flow Solutions: Our strategies are designed to keep more cash in your business while meeting all legal requirements.
Note These Important Dates
- 15th January 2025
- 7th May 2025
Planning ahead ensures that your provisional tax is manageable, and your business cash flow stays strong.
Let’s Get Started!
If you have questions about managing your provisional tax or want to make sure your strategy is on point, we’re here to help. Reach out to the Business Advisory Services team today and let’s set up a time to discuss how we can support your business’ financial health.
