Of all the big days in the calendar for the small business owner, the self-assessment filing deadline of 31 January is one of the biggest. This is the date by which you need to have file your self-assessment AND pay your taxes.
There’s a stereotype in the accountancy industry that we have to work throughout New Year and 7 days a week in January to support our clients to meet the deadline.
You can file any time!
But did you know that you can file any time from 6 April, which is the first day of the new tax year? According to HMRC, 96,519 people filed their tax return on 6 April 2020. This compares to 31 January 2020 with 702,171 returns completed. Apparently the peak hour for filing that year was between 16:00 and 16:59 on 31 January when 56,969 customers filed.
That feels like a lot of stress for the business owners and their accountants, and we think business finance should be a whole lot easier than that.
Have you thought about filing your tax return in the summer?
We are encouraging all of our clients to submit before their summer holidays. This year we are looking at the date when schools break up in July as the moment by which we want to have all our clients’ self-assessments submitted.
Here are the five reasons we think you should consider filing by July:
1. Peace of mind
You know that sinking feeling when something as important as your self-assessment is hanging over you, so why not get it off your to do list. We’re not advocating you pay your taxes early by the way, just submit the relevant paperwork.
2. Working parents
Many of our clients are working parents as are we! We all have more important and more fun things to be doing over the summer. And if your children are in primary school the autumn term is a never ending stream of school admin, from getting used to new classes and teachers all the way up to Nativity plays and Christmas parties. If you’ve submitted your self-assessment in the summer, it won’t get buried under a pile of emails from school.
3. Plan your cash flow
When you have submitted your tax return, you know how much you will have to pay in January. Filing in July gives you plenty of time – 6 whole months – to plan your cash flow to ensure you have the funds ready. Our clients who work on the Profit First method of accounting already have a plan to put aside money for taxes each month, but filing early means you know exactly what you need to save.
4. Work with the right systems
If you’ve got the right systems in place, it shouldn’t be a difficult job. All our clients have either a full bookkeeping service, or the training and support to do their own bookkeeping using QuickBooks. Assuming you are on top of your books every month, filing your self-assessment should be fairly straightforward.
5. Love your accountant
You can keep on the good side of your accountant! We joke of course, but everyone appreciates a client who is efficient and organized, and we are no different.
If you are a last minute kind of business owner but this sounds like the kind of forward planning you need in your business, we’d love to talk to you. We love working with small creative businesses who have big plans but are short on time. Let us work with you now to put the foundations in place so you too can file in July. Get in touch today!