Step 2 Work out your business and household budget

​Working out your business income

Extra advice:

tax returns

We would not normally recommend you use your last tax return to work out these figures. This is because your tax return figures are usually over 12 months old.
Also, the figures you work out for income tax, National Insurance and VAT on your budget are only estimates. They should not be used to complete the tax returns you send to HM Revenue & Customs (HMRC).
  • In Your budget, enter the income for your business.
  • Use your business accounts, books and bank statements to work out how much money you have taken for sales over the last three months. This will help you work out what your average monthly business income is, as for most businesses income is not the same every month. Do not include money for work you have done or things you have sold but have not yet been paid for. Only include money you have actually received.
  • Divide this total by three to get an average for each month.
  • If your receipts or takings go up and down a lot over the year, you may need to work out the average over a longer period, for example, 12 months. This could be because your business is seasonal.
  • Make sure you use a period of time that reflects the current income of your business.

Ways of increasing your business income

Security over business assets

Some creditors, such as banks, may ask for security over your business assets. This could mean you don’t have the right to sell the assets yourself. If you can’t pay the creditor, they may go to court to take these assets to reduce the amount you owe them. This means you could struggle to keep trading if the assets are essential to your business. If you are not sure whether you have given security over any business assets, contact us for advice.