Spring (and self assessments) are on their way
So the snow has melted and there has been some glimmers of warmth. Surely Spring is here? My initial thought is that the Easter holidays must be around the corner. This fills me with some panic about childcare but also some excitement about the prospect of mini eggs and Easter egg hunts. However, with my "accountant hat" on I quickly realise that the magic date of 5 April is almost upon us: the tax year end.
Perhaps less appetising than my favourite sugary sweets, it remains an important date for many and in particular those who were self employed, company directors or who are renting out property. They are amongst the list of people who must complete a self assessment tax return.
The return includes a summary of your income. This includes your earnings from employment and/ or self- employment, property rental and savings income. It needs to be completed annually. If you haven't registered for Self Assessment, and need to do so, do it as soon as possible (and definitely before the deadline of 5 October). If you are filing a paper return, it needs to be with HMRC by 31 October. However, most people file online and this can be done any time before 31 January.
Now, the good and bad news is that you might have tax to pay. It is obvious why that is bad news (less money for treats for you) but why is it good? It's good because, for the sole traders or property magnates, that means that you have made profits and that your enterprises are successful: something to be proud of. The balance of tax must be paid by 31 January. If the tax due is over £1,000 you will also be asked to make "payments on account" which are advance payments towards next years estimated bill. These are paid by 31 January/ 31 July each year.
So what do you need to do now? My advice is to start getting your financial records in order. It is your chance to make sure you are on top of your records of income and expenditure. The earlier that you gather the information, and prepare the return, the more time that you have to prepare for any tax that needs paid. Some easy tips to help you organise your affairs:
try to use a separate bank account for all business v personal transactions
consider using a savings account to put money aside for tax on a regular basis
regularly record your expenses, otherwise it's easy to forget about them - there are amazing apps to help you do this eg. Evernote, Receiptmate or Receipt Bank
keep copies of all of your business receipts (scans and photos are fine)
consider using an accounts system like Xero which includes bank feeds and can significantly streamline your paperwork and bookkeeping
if you are struggling, look to an accountant and/ or bookkeeper for help.
If you make sure that you are on top of all things financial, you will have the peace of mind to enjoy the next few months with no headaches. Instead you can focus on important dates such as Easter Sunday, May bank holidays and sports days without having to fear HMRC's red letter dates. Good luck!