Financial advice for seasonal businesses
Tax and benefits issues for seasonal businesses
Careful financial planning and choosing the right VAT scheme for your business can ease the pressures faced by seasonal businesses. In order to ease tax pressure, you should consider:
1. Year-end date
Choose your year-end date to fit the nature and cashflow cycle of your business. When choosing the most suitable date to submit your annual accounts, you should aim for a date that will allow you to:
- make the most of any allowances and reliefs available
- make your first payment of tax on account at a time appropriate to your cash inflow
- avoid having to prepare accounts during a busy period
2. Corporation Tax
Most companies pay Corporation Tax nine months and one day after the end of their accounting year. Seasonal businesses might find it useful to calculate their year-end date so that payment is due when cashflow is buoyant.
3. VAT Accounting Schemes
Seasonal businesses might also find it beneficial to use one of the VAT Accounting Schemes. HM Revenue & Customs (HMRC) provide guidance on the following:
If you are a farmer, GOV.UK has a separate Agricultural Flat Rate Scheme, which is an alternative to registering for VAT.
There are also VAT schemes for retailers, margin schemes for second-hand goods, art, antiques, collectibles and a Tour Operators' Margin Scheme.
For further information see get started with VAT.
4. Eligibility for benefits and tax credits
Owners of seasonal businesses that shut down for certain periods cannot claim unemployment benefits or Jobseekers' Allowance. However, National Insurance contributions must continue to be paid. If your annual income is low, you may be able to claim tax credits.
Applying early for these is important - any claims can only be backdated by three months. HMRC provides guidance to help you find out if you qualify for tax credits.