Thinking about tax returns and getting ready for the new tax year can send shivers up your spine. Yet it doesn’t have to be scary. In fact, the opposite is true if you get ahead of the rush and prepare yourself properly.
When Is New Tax Year?
First things first, you may be wondering “when actually is the next tax year”? If so, then you’ll be pleased to know that the new tax year starts on April 6th. This, therefore, makes now a great time to get on top of your incomings and outgoings so you can be ready for the year ahead.
However, not everyone has to send a tax return. You’ll only need to send a tax return if:
- You’re a self-employed sole trader earning more than £1,000
- You’re a partner in a business partnership
If you are either of the above and neglect to send off a tax return, you may end up paying hefty penalties. In fact, it’s thought that nearly 1.5 million people are risking fines due to incomplete tax returns each year.
How To Get Organised
The first step towards a successful tax return is ensuring you have all the information you need in one place. Whether that’s online or on paper, having everything together in one place can make the process a lot easier than scrambling for information at the last minute.
When you’re organising your tax documents, it can be helpful to sort them by category. For example, splitting your income, deductions and credits will all help make your return as simple as possible.
You may also want to dig out last year’s tax return and use that as a starting point. Although it’s out of date, it’ll provide a useful blueprint.
Whilst you’re getting organised, you may also want to consider different types of finance, so you’re ready for the year ahead, if you need it.
Make a Calendar Of Key Dates
We know that running a business or organising yourself as a freelancer is hectic at the best of times, never mind keeping track of when you need to pay your taxes!
One way to ensure you don’t drop the ball is to keep an eye out for important dates in the tax year. By creating a calendar of key dates, you can get ahead of the deadlines and always ensure you have the required information to hand.
You don’t want to wait until the last minute to make your tax return. When the tax year has finished on April 5th, you can start prepping for the next one! By regularly assessing your finances, not only will you be able to avoid the HMRC call queue, but you’ll have a better picture of whether your business is booming.
Although tax returns can seem daunting, they’re actually relatively straightforward. By getting organised early and ensuring you’re aware of all the important dates, you too can have a smooth tax return this year.