It’s late January, and the post-Christmas party hangovers are but a distant memory, while the real headaches are gathering force. A study published by AAT (Association of Accounting Technicians) last week showed that January is the main month for people to sort their ‘life admin’ tasks – but 56% of us struggle to keep up with everything that we are required to do.
One of those often dull, often complicated, but necessary tasks is to complete your Self Assessment return by 31 January, a tax deadline now looming extremely large. To recognise this, we spoke with a number of small business owners and experts about tax return woes, and in some cases how they’ve learnt from painful experiences of the past…
“Learn from your mistakes”
“The first two tax returns I submitted as a self-employed person were stressful. The first one I did myself, so I spent hours trawling the net for advice, constantly worrying I was going to fill it out wrong. By the time of my second tax return, I hired a bookkeeper to help, and whilst she did most of the legwork, my paperwork was a real mess. It took me days to get it into any coherent order for her to work from.
“This year, however, was entirely different, as I had most things in order, and I sorted it in April, months before the deadline. As I write this, I have to admit it’s a pleasure being in January and knowing it’s all taken care of. All I have to do now is pay my balance.”
Jen Smith, freelance writer and content strategist
“Save the stress – use an accountant”
“The very first year I did my Self Assessment, I took a day off work to get it all done. After a bit of research online and a rather embarrassing phone call to HMRC, I realised that my Self Assessment wasn’t due until the following year. Mega Fail. So make sure you’re working to the right deadlines before you even set off to do your return.
“If you’re not great with numbers, it’s totally worth talking to an accountant or bookkeeper. You can either spend hours of your time stressing that you’re not doing things right or pay someone to do it for you. You need to decide what your time is worth, and I know where I’d rather spend my time.”
Andy Cordina, founder of Bettie Confetti
“Don’t leave it to last minute”
“The key to a successful tax return is getting it done as soon as you can and being as organised as you can. For our clients who have detailed their expenditure, a tax return could take five minutes or so – especially those who have registered a personal tax account which regularly updates your HMRC records throughout the year. Also, don’t be afraid to ask others for advice, which can help you get your return correct first time.
“If you do make a genuine error on your return, this doesn’t automatically mean HMRC will treat you as a guilty party. We’ve had a couple of instances where clients have submitted returns in good faith, and HMRC has helped them amend any minor mistakes that have crept in with no penalties due. There’s talk that HMRC will move to a points system in future, where repeat offenders will be punished as their penalty points accrue. This seems like a good idea which will punish those who need to be punished and give sympathetic consideration to others.”
Henry Cooper, owner of BirchCooper Accounting Services Ltd