We’ve just come to the end of another tax year. Will you be submitting your return in the next few months or will you be feeling frazzled on 31 January, desperately trying to pull everything together?
Did you only just get your tax return in by the skin of your teeth and promised yourself it will be different next year?
Then this blog is for you!
The end of the financial year is a good time to be thinking about doing things differently. Getting your finances in order has lots of benefits, it gives you a chance to save for your tax bill and plan your money and makes the whole process a whole lot less stressful.
Soon, it will be even more important to keep on top of your financial paperwork. With the introduction of HMRC’s digital initiative ‘Making Tax Digital’ the annual tax return will be replaced with a quarterly submission. Not only that, you’ll only have a month after the end of the quarter to submit your return. So with that in mind, here’s a few tips for keeping on top of your books.
Even if you’re self-employed and don’t need a business bank account, open a separate current account for your business transactions. This keeps personal and business transactions separate and makes them easier to reconcile for your accounts.
Keep Your Records Up to Date
It’s worthwhile investing in a good online software package. Whilst using a spreadsheet can be an effective way of record keeping, online software allows you to track on the go. So you can log an expense, capturing a photo of the receipt and noting what it was for, immediately after making it. You still need to keep the original receipt, but it makes reconciliation quicker and simpler.
File Your Receipts
Whether it’s an envelope per year (or month) kept in a shoe box or a filing cabinet, try to file your receipts as soon as you’ve logged the transaction in your accounts. If you decide to schedule in a weekly session to catch up on your books, you can use some of this time to file your receipts. Then if you ever have an HMRC inspection, it’s all to hand and easy to find.
Henry Ford once said “Nothing is particularly hard if you divide it into small jobs” and this applies to your finances. Little and often makes things a whole lot easier and less stressful and will put you in good stead for the incoming tax changes.