Over the summer, many businesses are quieter than normal as everyone takes time off over the school holidays. If it’s a quieter time for you, then it may be a good opportunity to get all your paperwork ready for the next tax return.
The last tax year started on 6 April 2021 and ended on 5 April 2022. So, the online tax return needs to be submitted by midnight 31 January 2023 and the tax must be paid by the same deadline.
There’s a second payment deadline of 31 July if you make advance payments towards your bill (‘payments on account’).
You must send a tax return if you were:
- self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on)
- a partner in a business partnership
The benefit of getting your tax return in early is that you will be told what your tax liability is earlier in the year, and this can help you to prepare to pay the tax that you owe on time. Or, if you want to create a payment plan, you can contact the HMRC early to get this in place. If you do submit your tax return late, then usually, you must pay a penalty. You can appeal against a penalty if you have a reasonable excuse, but it’s worth trying to get it in on time if you can.
Here are some tips to help you get organised for your tax return.
- Income - Make sure that all invoices you sent to clients for selling products/services in 2021/22 have been paid. If there are any outstanding invoices, it’s a good time to chase the payment.
- Expenditures - Get all your invoices for expenditures together and put them into groups for each month. This will make it easier for your accountant.
- Alternatively, if you use accounting software such as Quickbooks, Xero, Sage or FreeAgent, then you can scan the invoices and upload them to software which makes the reconciliation process much easier. They all have apps you can use on your phone to scan or upload directly to your computer.
- You may also need to collate all your bank statements and credit card statements as this helps with the reconciliation process.
There are no rules on how you must keep records. You can keep them on paper, digitally or as part of a software program (like book-keeping software). The latter does help reduce paper usage which is always a good approach where possible.
We hope this article helps you get organised so you don’t have to rush with your tax return at the end of the year. If you would like any further advice, please contact us on 01623 490 120 or email