The Christmas holidays are usually considered a time for feasting and festivities, rather than for managing tedious business issues like tax returns. But if you’re one of the millions of small business owners across the UK that has to file a Self Assessment tax return by 31st January, the seasonal break may actually be the ideal time to get some of your tedious business admin out of the way. Here, Emily Coltman FCA, chief accountant to FreeAgent - who provide award-winning cloud accounting software for freelancers, micro-businesses and their accountants - explains why tackling your tax return before your turkey dinner could help your business get off to the best start in 2018.
You may have more time and fewer distractions
Many businesses face a slight slowdown during the festive season - especially on Christmas Day and Boxing Day when clients are usually having a break too - so this can be a good opportunity to get your ducks in a row for January. Whether it’s gathering your figures together in order to get your Self Assessment started, or making some headway with filling out the forms, you’re likely to get more done while your clients are taking some time off and the phone isn’t ringing off the hook.
Furthermore, if this is your first year of filing a tax return, you’ll have to register your business with HMRC before you can start the Self Assessment process - and you’ll need your activation PIN and Unique Tax Reference (UTR) from them in order to actually complete and submit a return. During the last minute Self Assessment rush in the new year, this can take longer than usual - so it’s a good idea to get it done early so you don’t risk missing the 31st January deadline and incurring a fine.
You should be less likely to make mistakes
if you're rushing to pull everything together in the weeks or days leading up to the Self Assessment filing deadline, you’re far more likely to enter incorrect information or accidentally forget to include something important. Getting started nice and early over the festive period means you’ll save yourself the stress and worry of trying to pull all your figures together in a hurry.
It also means that, should you want to, you’ll have more time to make a final check on your figures in January and make any changes necessary before the filing deadline passes. So you’ll be doubly sure not to risk incurring any fines for submitting incorrect data and not paying the tax you owe.
You could take time out from Christmas stress
Tired of turkey? Bored of board games? Sick of squabbling? Self Assessment may not be the most enjoyable task in the world, but when Christmas starts to feel a bit much, it’s a great reason to excuse yourself from the festivities and have some quiet time away from the hubbub.
in addition to taking a breather, you’ll be able to make progress on your business to-do list rather than simply watching The Great Escape for the umpteenth time. So it’s a win-win all round.
You’ll have a more productive (and peaceful) January
At the start of a new year, many freelancers and small business owners make resolutions and seek to implement long-lasting changes in their businesses. For you, that might mean reviewing your profit margins, taking on new clients or branching out into new markets - but it’s unlikely that you’ll be able to make that new beginning with the prospect of an outstanding tax return looming in the background.
By completing and file your tax return over Christmas, you’ll have all of January to concentrate on preparing for 2018 and getting your business off to the best start in the new year.
Emily Coltman FCA is Chief Accountant to FreeAgent, who provide award-winning cloud accounting software for freelancers, micro-businesses and their accountants. Try it for free at www.freeagent.com