Doing your tax return can be slightly daunting, and it doesn’t necessarily get easier as your business grows and develops – it usually gets more complex.
When’s the deadline?
For the 2016/2017 tax year, you’ll need to mark 31 January 2018 in your diary. The deadline for paper tax returns has passed (that was 31 October 2017), but online returns, and payments for tax owed, are due by midnight on 31 January 2018.
To complete your Self Assessment, you need to register first. The registration deadline for 2017 was 5 October, and it’ll be a similar date for the 2017/2018 return too.
The key is to be organised
You can never be too prepared for Self Assessment. The more detailed and complete your records, the easier it is. If you use accounting software, your gross earnings figure will be calculated for you. And if your Excel formulas are correct, a spreadsheet will do the same thing.
If you’re registering for Self Assessment for the first time, you’ll need to wait before you can get going. Your 10-digit Unique Taxpayer Reference and an activation code will be sent through the post within 10 working days (21 if you live abroad).
How long does it take to fill out your tax return?
Doing your Self Assessment is very ‘how long’s a piece of string’, because the more investments and streams of income you have, the more complicated it can be. When you keep your records up to date (that means your expenses too), a lot of the hard work will be done before you even log on to fill out your return.
If you have an accountant, you just have to gather all the records and make sure your figures are kept up to date. If you do it yourself, filling out the tax return itself could take anything from half an hour to a few hours to complete. Preparing everything throughout the year cuts it down considerably though.
Don’t let paperwork put you off
You can complete the entire process online, which is by far the easiest option. The traditional way of doing a tax return is going to be gradually phased out by HMRC, and replaced with a “simple, personalised and secure (service), offering an increasing range of integrated services”.
In the meantime, the online return will give you lots of options. The more streams of income you have, the more sections will be relevant to you. If you rented out property, for example, there’ll be an extra section you need to fill out.
Finding out how much you owe
Once your online return is filled in, with a copy sent to HMRC and yourself, the calculation is immediate. Depending on the amount, you’ll have the option of choosing to pay it all at once, or have it collected through your tax code in the next tax year.
If you go for the first option, you’ll be able to pay the tax by bank transfer or standing order through your Government Gateway account. The amount and payment details will appear in your online account within a few days, but you won’t necessarily get an email reminder, so you’ll need to check manually.
Managing your cash flow and tax season
It’s really important to keep your tax calculations up to date throughout the year, so you know how much you’re going to owe. Your accountant or accounting software will do this for you, as well as keeping an eye on your cash flow.
Once you pay your tax bill, it could be quite tempting to dip into your savings to pay for big plans like refurbishment and expansion. Instead, Capify offer business finance options that help you manage repayments and grow at the same time. Businesses can raise up to 150% of their monthly turnover and repay it as revenue comes in. Get A Quote