Now that the tax year 2021-22 has come to an end its time to start gathering information to complete your tax return.
Don't leave it until January 2023 and wonder why you didn't get on with it before. Not only are you likely to pay more for support from your accountant, you may not even have time to gather together all the information they need and you will end us with a penalty for not submitting by the due date.
There are advantages in preparing and submitting your tax return as soon after 6 April as you can:
- You may be able to reduce the tax payment you make in July 2022 if your taxable income is less than it was for 2020-21. Many businesses received grants in 2020-21 which were taxable income and these may have meant a higher tax payment than usual. Getting your tax return for 2021-21 sorted before July 2022 could mean a reduction in your advance tax payment in July.
- You may also be able to reduce your tax payment due in January 2023 but if not you will know well in advance how much tax you have to pay in January 2023 as well as in July 2022 and have time to save for it.
- If you don't receive quarterly or monthly finance reports from your bookkeeper the figures calculated for your tax return will tell you exactly how your business is doing and whether you are making a profit or not. You may be surprised how much profit you have made - and how much tax is due on that profit - if you rely on your bank balance as a guide.
- You have time to find the information your accountant needs to complete your accounts.
We keep our clients' accounts up to date providing them with monthly or quarterly finance reports and we estimate their corporation tax each month so they don't get a shock when they receive their final accounts.
Whilst we don't do tax returns, we do provide accountants with the year end accounts information within 2-6 weeks of the year end along with all the additional information they need to prepare statutory accounts or tax returns. Because we work on the accounts on a regular basis and ensure we always have the information we need, there is no scrabbling around to find missing information which the accountant needs to finalise the accounts.
Make 2022 the year you get your accounts to your accountant on time and if you aren't organised enough for this year, pass your bookkeeping to a bookkeeper so that you are organised for April 2023!