As we head towards the end of the year and one of the busiest sales periods for many businesses, one vital task can easily escape your mind…
If you're running your business as a sole trader, you might feel like 31 January is a long way off, and you have the security blanket of time to help you get your accounts in order.
But this is one of the biggest mistakes business owners can make this time of year… waiting till January to get organised only to find themselves unnecessarily stressed sorting paperwork and finding the money to pay their tax bill.
There’s an even bigger danger, according to Informi's self-assessment research:
“One in 14 small business owners we spoke to said they have missed the tax return deadline on more than one occasion… for those businesses the average fine was £284.56.”
We want to help your businesses prosper here at Informi, so let us help you avoid any fines and undue stress by sharing four things you can do now.
First and foremost, it’s vital to know what tax deadlines are coming up:
If you want to hire a bookkeeper or accountant to help you prepare and submit your tax return, now is the time to find and hire one.
Professionals are under a lot of pressure in January to help existing clients get their taxes sorted, often at the eleventh hour. You may find, if you leave it till the New Year, there are less people available.
Whether you hire someone to help or Do It Yourself, it can take time to get all the necessary paperwork in order.
If you’re not one for filing receipts, invoices and purchase orders as they come in, now is the time to get organised.
If it feels like too much, do one task a week - e.g. could you make sure your business is logged properly this week?
You can have the best will in the world and still fail to save properly for your tax bill. When cash flow is up and down, or you rely on everything you bring into your business, it takes mammoth discipline to keep money aside (trust me, I know!).
But it’s unlikely to get any easier to find the money come January (especially after Christmas), so start saving for your January payment now if you have yet to do so.
One tip my accountant gave me, which has helped enormously, is to set up a standing order to transfer a certain amount every month into a savings account for taxes. It doesn’t then rely on me to put it in, and accumulates throughout the year, so tax bills are not such a shock!
And finally, a little bonus for you once all four steps have been completed and January arrives: Allow yourself to feel a sense of pride when many are losing their head, knowing that you did all you could back in October (i.e now) to make your life easier.
Jen Smith is a freelance writer and content strategist. Follow her on Twitter @_JenSmith
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