Self Assessment is one of the main bugbears of self-employed folks.
Who enjoys looking through own their finances and working out how much tax they owe?
It’s easy to put it all off until “next week” when you’re busy running a business. Every hour of your time is precious and you don’t want to waste it sifting through receipts.
However, by getting round to it sooner rather than later, you can avoid unexpected tax bills and gain an insight into where you could be saving your business money.
Here are a few reasons why you should get your Self Assessment tax return filled out early and not wait until the January 31st deadline.
No nasty surprises.
The longer you leave your tax return, the less time you’ll know how much you owe HMRC.
Submitting early means that you know exactly how much you need to pay when the deadline comes around.
We’ve all heard the horror stories about business owners who left it until after Christmas and found themselves immediately owing thousands of pounds.
Doing it in advance won’t lower your tax bill, but knowing what you’ll need to hold back or save up to pay on time and without a late payment fine.
It’s not hanging over you as a to do.
For as long as it’s on your to-do list, your tax return will niggle away at you.
It’s just another thing to put off until next week and feel guilty about when it’s still there, glaring at you in your diary.
Imagine a whole summer, free from worry about completing that tax return. Get it sorted now and you can be sipping Pina Coladas instead of calculating profits and costs.
You can learn a lot about what you’ve earned and use that knowledge to grow this year.
Getting to grips with your incomings and outgoings can help you to make sound financial decisions for the future.
For example, it can help you spot areas where you could save money, as well as when you should invest in some of the more significant purchases for your business in a tax-efficient way.
Bonus – your accountant is happy with you.
We’re not going to lie; it’s a lot less stressful for us accountants when clients are early birds.
Presenting your accountant with a shoebox full of receipts won’t make them happy bunnies.
In all seriousness, the earlier you engage an accountant and take steps to submit your Self Assessment, the more value you can get out of your accountant – they’ll be able to help you see areas in which you can drive your business forward for the next twelve months.
Remember – you don’t have to pay straight away.
One reason many put off sorting out their Self Assessment is they believe that once submitted – they have to pay up as soon as possible.
This is not the case. You have until 31 January to square up with HMRC.
Filling your tax return out early empowers you to plan ahead and prepare for a successful financial year.
If you would like any advice on Self Assessment, please speak with a member of our team today.
In the meantime, you can download our printable Self Assessment Guide.