It’s now December; only the beginning admittedly, but December none the less, and if you are a small business owner you really don’t have that long to file your self-assessment tax return. The 31st January 2015 may seem ages away – there are turkeys to stuff yet and a whole New Year’s Eve to live through – but it will come round quicker than you can say ‘dammit’. Miss the deadline and you can collect an automatic £100 fine; I’m sure Her Majesty will spend it on something lovely.
Her Majesties Revenues & Customs (HMRC) make no secret of the deadlines, but every year thousands of the self-employed fall foul of the dates and end up stumping up for the Queens new hairdo, or something. Even the most cursory glance at the HMRC website will tell you that you need to have filed paper copies by 31st October and on-line returns three months later. In addition to the automatic £100 fine, HMRC will continue to charge you £10 per day for every day that your return is late, and up to a maximum of £900. They don’t say what happens after they have collected £1,000 in fines from you but it’s likely that HMRC – who have greater powers than the Police when it comes to entering your property – will start getting really serious.
So how can you avoid paying for next year’s HMRC Christmas party? Self-employed people are among the hardest workers in the land, regularly putting in hours that would make a company employee wince, and so it is easy to keep putting things off, but with a bit of organization, you can stay on top of things. Here’s how;
• Be prepared. It works for legions of Boy Scouts and can do the same for you. Plaster the deadline on your fridge door, set multiple alarms on your smart device, or get your partner to keep reminding you, but just don’t wake up on the 31st, mentally clicking your fingers and struggling to think of the important thing you had to do that day.
• Start early. You’ll get a fine for being late but there’s nothing to stop you starting an on-line return early and updating it as you need to. Open a new one now and revisit it often. Last year around 450,000 people left filing their returns until the 31st January, with a staggering 37,000 trying to do so between the hours of 4pm and 5pm that day!
• Employ an Accountant. If you’re not on the ball, they will be and for a small and worthwhile fee you can have the whole lot done and ready with minimal input. Your accountant will be well aware of all the deadlines and what is needed to meet them, thus reducing your headache. Your accountant is also tax-deductible in most cases, so there’s just no excuse for not using one.
Every year thousands of people pay unnecessary fines simply because they have missed the deadline, and that money is something that is not being ploughed back into your business. By thinking about the approaching deadline and not leaving it to the last minute, or using an accountant, you can reduce your stress levels as well as find that you may be in line for HMRC paying you back too!