If you’ve ever had the pleasure of filling out a tax return, you’ll know how laborious the process is. Sitting there with documents in hand, your mission is to report every penny that’s made its way into your business since last April. In the end, you’ll be given a bill for your trouble. If you don’t submit your return on time or correctly, it could lead to serious fines. Hence, tax returns can be very stressful.
The fact is your tax return still needs doing whether you enjoy completing it or not. Here’s how to make your tax return less stressful to lighten the load.
Don’t put it off
In the toss-up between dentist vs tax return, most people would prefer to have that root canal rather than work out how much they owe HMRC. Those who earn at least £1,000 from their self-employment are given until January 31st to complete their tax return, along with paying any amount that’s owed. Given that the tax year ends in April, that’s a lot of time to get it done and dusted.
While nobody enjoys filling out their tax return – let alone paying tax and other contributions – it’s something you simply can’t ignore. Like with any difficult task you face in your business, avoiding procrastination is the best way to go. Even if you are facing a large bill, if you have several months to figure out a plan, this is far less stressful than finding out the day before you are supposed to pay it!
Work as you go along
Spending hours trawling through your accounts, trying to work out how much money you’ve earned this year is very time-consuming. Given all the software that’s available these days, it’s unnecessary too. Filling out your books as you go is far better in the long run, as you won’t have to sift through mountains of receipts or bank statements.
Remember that HMRC can ask to see your books at any time. The last thing any business owner needs is a mad scramble to throw your accounts together when just a few minutes a week could take care of the hassle for you. It will also help you to track your profits better too, which can vary from month to month, especially if you’re a freelancer.
Create a separate savings account
One of the main reasons that a tax return is so stressful is because when you’ve completed it, you then have to hand over a large wad of cash. Anything up to £12,500 is part of your personal allowance, but above that figure, your income will be taxed at between 20% and 45%.
Understandably, paying tax is daunting for most people. But one of the ways you can lessen the sting is to siphon the money out into a separate savings account automatically. That way, when it comes to paying your tax bill you’ll always have the means to pay it.
Consult an accountant
Accountants are undoubtedly the best people to help you with your tax return because this is their area of expertise. Plus, most people find they actually save money by using an accountant, especially when it comes to things such as the deductions you are entitled to claim.
They will also make sure your tax return is submitted correctly and on time, which will be a huge weight lifted off your mind. Compared to going it alone when you aren’t sure what you are doing, asking an expert is always the better option.
Take the pain out of the process with trusted tax return accountants on Bark.
To Sum Up
As with all aspects of running a business, forward planning can save you a lot of aggravation. Completing a tax return is no different. By not putting it off and saving as you go, you can make the process much smoother.
If in doubt, an accountant can help you make sense of everything. They can even show you where you can make savings, as well as ensure everything is submitted correctly and on time.