For small business owners, tax season can be a stressful crappy time of year. It’s understandable that you bury it until the last minute! But as an accountant, every year I see business owners feeling stressed as the season approaches because they know deep down that rushing things and leaving it to the last minute can lead to mistakes and penalties.That’s why it makes sense to get ready for tax season right now. In this blog post, we’ll explore why now is the time to get your self-assessment tax return done, instead of waiting until the deadline of January 31st.
You don't want to be doing your tax return over the holidays.
Every year I have conversations with new clients that are stressed, worried, unhappy and even anxious over Christmas thinking about how much tax they might owe or just getting their tax return done in time. With the added pressure of balancing work and family commitments, it's easy to put off sending your tax return until January. ‘I’ll get Christmas out of the way first’ is a common thought. However, with the deadline of January 31st fast-approaching once the Christmas decor is all packed away, you will find yourself cramming it all into a couple of weeks in January, and worse still, potentially having a bigger tax bill than you thought, with little time to get the money together. Payments on accounts (POA) being triggered unexpectedly also have a major cash flow impact. You can read more about POA in my blog here.
The deadline is a firm deadline, not a target.
You are not alone if you believe that the filing deadline of January 31st is a "target" rather than a firm deadline. The HM Revenue and Customs (HMRC) takes non-compliance very seriously, and failing to submit your tax return by the deadline could result in a fine. Get it done and off of the list as soon as you can. Plus there is no wiggle room for tech issues that might arise such as crashed HMRC website, log in issues, auth codes not working etc
Here’s the unexpected benefit
The most important reason to get your tax return completed now rather than later is to know your numbers. It gives you time to save for your tax bill if you haven’t already (talk to me about this, I can help), and it is key to knowing your numbers.
Your tax position reflects your business performance for a certain frame of time, and we expect you want to know how you’re performing in as near to real time as possible. Understanding your financial situation is vital in running a successful small business. By knowing your financial figures in-depth, you can make informed decisions for your business, plan for the future, and stay on top of your finances.
Did you know:
It doesn't matter when you submit your return, you still have until 31 January following the tax year end to pay your tax liability! Knowing your figure and still having breathing room to save if you need it.
You can make weekly or monthly payments with a Budget Payment Plan towards your next tax bill if this feels more comfortable than paying a lump sum
Conclusion
Getting your tax return done as early as possible is crucial. Of course, this avoids unnecessary added stress, mistakes and penalties, but it means you have feedback on how your business is doing. At May.i Finance Ltd we encourage our clients to file their tax returns as early as possible. Get that tax return sorted now so you can move on to more exciting things for the holidays!
Feel free to reach out to us if you ever need assistance. We have various contact methods to suit your needs. See our contact page HERE.
Take care of yourself !
Becky x