The new tax year is upon us and the clock starts on getting our tax return into HMRC by the 31 January 2020 deadline. The pressures of juggling a small business with life often get in the way and the tax return is easily filed under ‘not due yet’. But we could be seriously impacting our business by leaving it until the last minute. We asked the Mumpreneurs Networking Club community for their best tips on why we should do our tax return now in April or May rather than 11.57pm 31 January 2020!
Plan for profit, savings and growth
MNC Director and co-founder Sara Gueil points out the importance of seeing your financial situation and building on it or adapting for survival, “The great thing about getting it done early is you can see where you are. It gives you space. Space to see what adjustments are necessary, space to double check – perhaps with an accountant or bookkeeper. It also gives you time if there is tax to pay. Especially if you’ve been caught out and perhaps didn’t quite have the handle on your numbers you should have! Most of all peace of mind … who wants to think about this in the festive season only to scramble it in an already moody month at the beginning of a new year when new exciting horizons should be your business focus!”
MNC Brighton member Jessica Freeman echos this, “Being able to do my tax return now is almost an added benefit as what I’ve found really useful is knowing the financial position as I’ve gone through the year so I can make clearer decisions about my business. It also takes the pressure off for the rest of the year without this looming arduous task hanging over me. I’ve got time to correct any silly mistakes so not risking a fine.”
“Knowing how profitable your business was in the last year should shape how you approach this new tax year. Time lost could be lost opportunities for improvement, improved efficiency and increased profit,” says Worthing MNC member Lisa Donlevy from LevyBooks.
January is stressful enough (remember?)
“Getting through January is enough of a stress without the pressure of a tax return, it’s a long month, financially and for many, the cost of Christmas lasts into the new year; it can be a depressing time for many and if you add the stress of more financial “stuff”, it doesn’t help?” says Kate Henwood, Manager of Arundel and Littlehampton MNC group.
“I find Christmas exhausting, so absolutely don’t relish doing my tax return in January. But somehow I always end up there,” says Brighton MNC member Claire Jones-Hughes from Clarita Digital. “This year I did a bit of work on my profit and loss and spotted some savings I could have made ages ago if I’d spent some time analysing my tax return. So I’ve put some time aside before summer to break that pattern so January can be spent refining sales strategy and marketing plans.”
Stay on top of your records
MNC Member Pauline Baker updates her records regularly, “For both my own and my clients’ records I have our tax details updated on a weekly basis so they are ready at any time for inspection or submission. For my business I then wait for the request from HMRC for the final figures. Makes no difference to when and how much I have to pay!”
Lisa Donlevy from LevyBooks makes a crucial point about accurate record-keeping, “It’s far easier to address queries now than trying to remember 9 months down the line. Most importantly you can budget for paying your tax in January 2020.” So instead of the panic and stress of a ‘surprise’ tax bill in January, you’ll know exactly how much it will be.
“You can enjoy the summer and Christmas hols feeling slightly smug,” she concludes.
And what a great feeling that would be!
Join us online for MNC Online learning festival 3 – 7 June where a wealth of business tips are waiting for you during a week-long programme of online talks from experts across sales, marketing and digital. More to be announced in the coming weeks!