1. Get it done as early as possible
Even if you’re close to deadline right now, DO NOT PROCRASTINATE over your tax return. HMRC received nearly 600,000 tax returns on the day of the deadline (31 January) last year, and many reported the online system slow that day, adding to the pressure. Not only is it incredibly stressful doing it this way, you risk an immediate £100 fine for late submission.
The sooner you can dedicate a day or two to getting it sorted the better. Make it your number one priority, and clear your diary to get it done.
If you’re not nearing the deadline, or you want to avoid the stress for the next tax year, then I recommend scheduling a time into your diary after the year end in April where you focus solely on sorting and submitting your tax return.
This has a secondary benefit – you will know precisely what you owe to HMRC well in advance and can make provisions financially as well.
2. Get everything you need to hand and organised
One of the best strategies for making your tax return submission as easy as possible is to get everything you need to hand. That’s all paperwork, for example:
- mileage logs
- and all evidence of income and expenses.
You can do this digitally – by creating a folder for your tax return on your computer with subfolders for all relevant documentation. Or, the old fashioned way by printing everything off and organising it into folders.
Even better, if you can create a system, offline or online, to organise your documents month on month, and keep it updated regularly, you’ll find you don’t have to carve out days to get organised at the end of the tax year.
3. Get advice or support from a registered bookkeeper or accountant
Unless you’re a registered bookkeeper or accountant yourself, I highly recommend paying someone else to prepare your tax return for you. Of course, you can do it yourself, but in my experience, I’ve found the time I’d spend trying to do it (and worrying about whether I’ve got it right) is much better spent making money in my business and serving my clients. And, the cost of outsourcing is far less than what it would cost me in hours doing it myself.
Not only that, I’ve found that employing a professional to help me with my tax return has actually saved me money, as it’s their job to understand all the current allowances available to you as a business owner.
If you need more convincing, calculate what your hourly rate of pay is in your business, and how many hours on average it would take you to prepare your tax return. If it’s higher than (or close to) the cost of getting someone else to do it – outsource it! You’ll be doing yourself a huge favour.
Last but not least, if you are in panic mode I have one last tip for you: forgive yourself. Beating yourself up for leaving it to the last minute won’t help you get it done faster. What’s done is done, and the sooner you can accept that, and resolve to not make the same mistake again, the sooner you can get your tax return submitted.
There you have it. Some good simple tips for taking the stress out of submitting your tax return. We have loads of useful resources on Informi to help you manage your business finances including our self employed tax calculator – a great way to get a rough idea of how much you’ll be paying in tax.