It’s that time of year when the cut-off date for tax returns is fast approaching. Even though we know it’s coming, it’s still something many business owners put off until the last minute.
Make a start
If you’ve been putting it off, make today your deadline for starting your tax return. It’s far easier to break the task down into bite-size chunks and tackle each one logically than it is to try to do everything at once. You’ll feel able to take breaks to clear your head, and this reduces the chance of making potentially expensive mistakes.
If you’re really struggling to get amongst the figures, try the ten minute game. Set a timer for ten minutes and tell yourself you just need to focus on the task for that time. Anyone can focus on anything for just ten minutes. Chances are good that once the ten minutes are up, you’ll have broken the barrier of procrastination and feel motivated to carry on a bit longer.
Thoughts to sharpen your focus:
- The deadline for online returns is 31st January, with hefty penalties if you miss it.
- If you need to phone the HMRC helpline, waiting times get longer as the deadline approaches.
Have what you need to hand
Before you enter a single figure on your tax return, make sure you have all your paper and online evidence to hand. How easily you can gather the evidence needed to fill in your tax return depends on how organised you’ve been through the year. If you know you’ve been a bit scatty, it’s even more important to allow time for evidence gathering before you start filling in boxes on the return document.
You’ll need:
- Evidence of Income. Gather together your bank statements, invoices and online money receipt records, including receipts for cash payments you received. Go through every transaction in your bank account and make sure nothing is left unaccounted for.
- Evidence of Outgoings and Payments. Again you’ll need bank statements, receipts, invoices, online records. Don’t forget payments for motor or travel expenses, insurances or hospitality. Petty cash accounts are easily overlooked, so make sure those are also accounted for.
Having collected all your documented evidence put it into date order if it’s not already. It may help to print out online statements as this can make them easier to annotate and cross reference.
Don’t forget allowances
If you use part of your home for business purposes, you can claim a percentage of household costs. There’s no one, definitive, answer as to the amount you can claim as it depends on individual circumstances. Don’t try to guess if you’re not sure as HMRC frowns on guesswork. A bookkeeper or accountant can advise, and the HMRC website also has guidelines available.
It can take some time to accurately calculate all your allowances so don’t delay any longer than you have to. The potential reduction in your final tax bill makes it well worth the effort.
Not everyone manages to incorporate routines that make tax returns painless into their daily business lives. If you’re finding you constantly have a battle to meet the deadline, consider hiring professional services to help with your tax return. It’s probably not as expensive as you imagine, and just knowing your finances are in order and everything is legal is a weight off your mind.