How to make next year's tax return easier.
Updated: Feb 2
Tax season 2023 is officially over! 🎉
As an accountant with numerous tax returns to file each year, I couldn't be happier that it's now February.
Within the accounting industry, January is officially in the thick of "Tax season". If you've not heard that phrase before, it's the time of year that everyone rushes to get their self-assessment in with HMRC before the deadline on the 31st of January.
Were you one of the many people panicking in January trying to get it done while the deadline crept closer and closer? Were you getting frustrated at all of the "tax stuff" and stressed out about ending up in "tax jail"? (FYI, that is not a real place!)
Last year 630,000 people filed their tax returns on the deadline day, and 20,947 of them were filed between 23:00 and 23:59! I'm interested to see the stats on 2023 when they are released.
If the stress of doing your tax return was too much, don't panic as I've got some tips to get you organised and ready ahead, so you don't feel the same stress when you file your 2022/23 tax return.
Unfortunately, the first piece of advice is to start early. You may have just filed your 2021/22 tax return, but I now want you to start getting everything together for 2022/23. This is about being proactive so you don’t panic in January 2024.
I know we still have 2 more months of this tax year left, but getting the past 10 months together now will save you a lot of time and stress later. You can then add the two final months on once they've happened, which makes it so much more manageable.
Now is also a good time to think about the systems you use. Do you stash all of your accounting records in a carrier bag (I hope you at least flatten them out!) or do you use a spreadsheet? Do you use accounting software?
Have a review of your systems and see what is working for you and what isn't. Did you start a spreadsheet but stopped using it because you hate Excel? Did you start using Software but haven't matched off your bank feed for a while?
Now is the time to see what works and what doesn't and make some tweaks. This gives you time to figure out what would work better for you and you can then get ready to implement it at the start of April, making it a seamless change over between tax years. The right thing for you is the “path of least resistance”, something you can be consistent with.
You may now be wondering what the benefit is to getting everything organised early.
Apart from not having a January panic to get it filed before the deadline, once it's filed, it's one less thing for you to remember to do freeing up brain space for other things you enjoy. If you're organised, you can file it as early as the 6th of April (the first day of the new tax year), but filing in May, June or July is also good.
Another benefit to it being filed early is you'll know what tax you need to pay and will have until January to pay it. I'm hoping that you save towards your tax bill throughout the year, but if you don't at least you know what the bill will be and what you need to save. That can be the worst part of filing it last minute in January, having to pay the bill straight after filing it.
If the thought of doing your 2022/23 tax return yourself fills you with dread, hiring an accountant (like me!) to do it for you can make the process much easier.
Having your accounting records sorted and ready to hand over means you can book in early and get well ahead of the rush. You will also have a very happy accountant if you're ready to file right after the tax year ends.
If you want to have a chat and see if I can help remove your tax return stress for 2022/23, get in touch via my contact page.