Summer is over - time to get organised!

The holidays are over, the kids are back at school and it's time to get your business organised for the end of the year.

While the tax year ends in April and, for limited companies, your financial year end could vary, it is time to start preparing for your personal tax return.

The personal tax year ended on 5th April 2021, so with nearly 10 months to get your paperwork together, there's really no reason why you should wait until January to get your tax return sorted.

If you're on PAYE it may mean you don't need to do anything - but people forget all the other bits of information that might affect their final tax obligation. This might include:

  • Share disposals
  • Other capital gains
  • Pension contributions
  • Charitable donations
  • Interest from trusts
  • Interest on savings accounts
  • Rental income

Whether you're employed or self-employed you'll need to check all these.

If you're self-employed you will pay income tax on everything you earn - after your business running costs. That means that every receipt and invoice will make a difference. Trying to find everything in a panic when the days are ticking past in January simply means you'll probably pay more than you need to.

If you're a company director you will almost certainly be drawing a minimal salary and additional income in the form of dividends. This will need to be accounted for - along with any other income (as above) and don't forget any non-exec roles that you may be remunerated for.

The upside

The tax year 2020-21 was a difficult time for many businesses and, if you're making payments on account, it may be that the original calculation has resulted in you paying more than you need.

That means you could be due for a refund. For self-employed people lower profits mean less tax to pay. The sooner your annual return is done, the sooner you can apply for your refund. Maybe a nice little deposit in your bank account in time for the festive season!

Your accountant will be grateful if they're able to get your personal tax sorted out sooner rather than later. Nobody wants to be working right up to a deadline, it's stressful for everyone involved.