02 Feb How To Be Smug About Your Tax Return!
Let me say this first because it’s the most important, 31st January is not your tax return DUE date, it’s the final, very last day you can submit. We all know that leaving things to the very last minute only causes added stress, frustration. Not to mention the wasted time as many have to take time out of their business day, rearrange plans, pull out old paperwork, struggle to find receipts, and all the things that seem to take longer than usual when you are in a rush.
Bookkeeping can be difficult and complicated, especially once you have multiple income streams and lots of different kinds of expenses. That’s why there are bookkeeping exams and why there are professional institutes like the Institute of Certified Bookkeepers. However, for the small business owner who has fairly straightforward income and outgoings, it’s possible to DIY with a tax return. I’ve pulled together some tips to help make sure that by the time next January comes around you are feeling relaxed and a little bit smug that your tax return is done, filed, and paid.
- Did you know you can organise your tax return from April 6th this year? Yes, since you will have all the records from the previous year and the tax year April 6th 2017 to April 5th 2018 will be over you can get started as early as you like.
- You can pay monthly, this is particularly good for small business owners who struggle to put money aside and end up struggling after Christmas to pay a lump sum. Set up a regular direct debit so a set amount comes out of your business account weekly or monthly. You will have a nice amount ready to pay towards your bill and if you have overestimated you may even get a refund which is always nice.
- If you’re thinking about getting a bookkeeper to help you, start asking for recommendations now. Towards the end of the year, they may be too busy to take on new clients. And I’ve no doubt they’ll also want to avoid ones who are wide-eyed, stressed, and have a messy stack of receipts. Bookkeepers can be surprisingly reasonably priced, you can often spread the cost, and they may even be able to reduce your tax bill enough to cover the expense.
- Sign up for some of the HMRC webinars and listen in while they walk you through completing the form, answering your questions, and generally sharing some valuable wisdom. They cannot discuss individual cases but since you’re so early in the tax year you’ll have time to call or search the website for answers.
- Buy or use a box file you already own as your Tax Box, use separators or plastic files and add all your previous paperwork, any relevant P45s or P60s, invoices, and receipts. Technology is constantly advancing and the accountancy industry is catching up. There are various apps you can use to send invoices, keep track of your income and expenditure, and screenshot receipts. Some of them use cloud accounting and others you can send the files direct to your accountant or your own laptop when you’re ready to complete your tax return.
- Know what you can claim for in advance – create a short list, print it out and stick it to the front or inside of your tax box. Then anytime you’re unsure you can refer to the list, pop all your taxable receipts in and bin the rest.
- Check your numbers!Double check all your invoices and receipts but also review any allowances you may be entitled to like marriage allowance. Since you’re organised and getting things done nice and early you’ll have extra time to double and triple check everything is correct before you submit. Last minute submissions with mistakes can be costly.
Follow as many of the steps above as you can and when January arrives the only thing you’ll have to be concerned about is keeping up with those New Year, New Me Resolutions you promised yourself!