Tax Return






Illustration: Stephen Cheetham

Few tasks on our to-do lists make the heart sink faster than the annual tax return. Many people would rather undergo root canal surgery than go online and plough through pages and pages of questions that could result in a four-figure bill.

While it might bring back memories of sitting a particularly nasty maths exam, filling out a self-assessment is required by HMRC for anyone running their own business or not taxed as PAYE. The requirement also covers couples who claim child benefit where one partner earns more than £50,000, or those enjoying overseas income. In the past tax year, 11.5 million people had to file a tax return.

For those that qualify, the responsibility to file a return is theirs alone. There are penalties for lateness that increase exponentially and can run into thousands of pounds. In the past tax year, 700,000 procrastinators missed the deadline. Meanwhile, nearly three-quarters of a million people filed on deadline day, most probably highly stressed and omitting details in the process.

However, our negative attitude to filing a return is where we go wrong in the first place, says Jonathan Amponsah, founder and CEO of The Tax Guys, author, and co-founder of the tax-return app Easy Tax Returns. “Don’t view HMRC as an ogre,” he says. “We all have to pay something, no one is special or above the law, but then no one is obliged to pay more than they have to. If you are organised and do your homework, then you can ensure that you claim every benefit and save money in the process.”

Moreover, getting your tax return and other essential admin tasks done frees up your mental energy to focus on the more creative or strategic elements of running a business – which are not only important, but more fun.

“The mental block is there because no one wants to think about tax or numbers,” says Amponsah. “But if you struggle that much, spare yourself the pain and outsource the job to an accountant, giving them enough time. They will probably save you money. If you don’t want to go down that route, then at least build in enough leeway for yourself so you don’t miss things.”

It is generally accepted that one of the best ways to tackle a difficult job is to break it up into small pieces. These can then fit into those little moments of spare time we sometimes find ourselves with. Filling in an online tax return can be treated in the same way. This approach even has a slick neologism, “microproductivity”, so you can feel like you’re on the cutting edge of tax-return filling. For instance, you could try viewing each section of the return as a distinct task to be completed on its own.

Plus, if you file your returns early, HMRC does not wait until the last day of January to pay out any refunds due. So you could receive a nice present to begin the new year, following the traditional Christmas splurge. You could also save yourself some money. “People don’t understand what they can claim for and what they can’t,” says Amponsah. “On the one hand they think they can claim for a parking fine because they were on business – not true – but on the other there are benefits for things like research and development to encourage innovation.”

A lack of organisation is another big fail. Wading through 12 months’ worth of paperwork for P60s and interest payments, and vainly searching for digital invoices is no fun. So keep it simple. Find a handy box or a big envelope at the beginning of the tax year, write the tax year date on it and every time you receive something relevant, stick it in so it’s all in one place.

Alternatively, you could try to automate the process. “There are lots of apps that simplify the job these days,” says Amponsah. “It’s not even technical. For example, if you’re a sole trader mostly dealing with paper invoices and bills, there are scanning and tracking apps like Shoeboxed or Receipt Bank. Say you need to stop off and buy some paint, you can just scan the receipt with the app and it stores it. You can link that to an online accounting platform so it makes everything a lot easier and minimises the chance of missing something you should claim for.”

Face the facts. You’re going to have to file a tax return, so be proactive, be positive and see how much you can benefit – emotionally and financially.

Whatever your business, don’t keep knocking essential tasks to the bottom of your to-do list.

Tailor your business insurance with AXA. It couldn’t be simpler. That’s one less thing to worry about, and more time to spend getting on with business. Get a quote online today.



READ SOURCE

READ  Tesla shares are getting slammed after Elon Musk's off-kilter interview with the NYT

WHAT YOUR THOUGHTS

Please enter your comment!
Please enter your name here