Long summer evenings do not equal thinking about tax returns or planning. However, it can be the best time to kickstart this process gathering information so there is less pressure as the deadline approaches. Whether you are self-employed, own a rental property, let property through Airbnb or are obliged to complete a return for whatever reason, you must file your tax return on or before 31 October in the year after the year to which the return relates.
So by 31 October 2019, you are due to file your 2018 self-assessment tax return and pay any Income Tax (IT) balance for 2018 as well preliminary tax for 2019. You can extend this deadline if you pay and file with ROS until mid-November. However much we don’t like paying tax, filing tax returns is a necessity that every business owner must do.
If you use an online bookkeeping and accounts system, then a lot of your information is already in one place. If not start gathering it together from the various files you may have.
Here are the top 5 reasons to do your tax return early:
1. You’re Aware of your Tax Liability
By doing up your accounts well before the October deadline, you know exactly how much you will have to pay. Even though I always recommend monthly management accounts, I know some business owners just get busy and only do annual accounts. Knowing how much you owe will allow you to plan payments effectively and there are no surprises then. You know well in advance what your tax liability is.
2. More Time for Planning
Following on from the point above, having your accounts done early allows you to plan for the remainder of the year. I have some clients who actively pursue a sales campaign to bring in cash to pay for the tax that is due in October.
Other clients like to plan ahead so knowing your balance for this year and estimating it for next year gives more than a full year of tax planning. Those vital months could make a huge difference in cash flow and budgeting.
3. It’s Off the To-Do List
I know it sounds like a bit of a limp benefit but just think about it. How many things are on your to-do list? How is your sense of over-whelm? If you give your documentation to your accountant, you can do what you do best – run your business. Sometimes having things on our to-do list makes the job seem much bigger than it is. Start early and there will be no stress later in the year.
4. You avoid the unknown
While we often don’t like to think about it, illness and family emergencies happen. You need to file your tax returns on time or you get fined. It’s as simple as that. To avoid a situation where you may be unable to gather all the information to pass to your accountant at the right time, simply do it now. The summer time is quieter for a lot of businesses so take advantage. Spend an afternoon with your bookkeeper, your accounting team or with yourself and gather all the necessary data.
5. Accountants Have More Time and First In, First Out!
Before the madness of tax season descends, your accountant will normally have more time to focus on your accounts. This means that your return gets done early and they won’t be chasing you for any outstanding information as often as they would in October time. It also means that you can get to speak with your accountant in detail on this well in advance of the income tax deadline.
Begin assembling all your relevant financial documentation – bank statements, receipts, invoices, emailed receipts and cloud-based receipts. Take the pressure off yourself and do this in the next few weeks. Don’t leave it until September.
If you’d like to talk to us about anything in this article, please feel free to contact us. We can help keep your business in shape this year.
AG Associates is an accounting practice that specialises in affordable accounting and payroll solutions for the SME business owner. It also offers training on accounting software. For further information please contact Angela at Unit 11, Eastgate Way, Little Island, Cork. 021 4824723 or firstname.lastname@example.org
AG Associates Accountants
11 Eastgate Way, Little Island, Cork
021 482 4723