5 Reasons to Do your Tax Return in Summer

If you’re in business, the reality is that you must pay tax. For the self employed under self assessment, you must pay your preliminary tax for that year, file your tax return and self-assessment for the previous tax year and pay any balance of tax due for the previous year. So by 31 October 2017 you must pay your preliminary tax for 2017, file your 2016 self-assessment tax return and pay any Income Tax (IT) balance for 2016. Also to note when you pay and file through the Revenue Online Service (ROS), the 31 October deadline is extended to mid November. However much we don’t like paying tax, filing tax returns is a necessity that every business owner must do.

I have been advising clients since I started AG Associates over 10 years ago that the summer time is the best time for starting the preparation on your income tax return. Slowly but surely many of my clients have embraced this for many reasons.

Here are the top 5 reasons for you to consider.

1. Accountants Have More Time

Accountants always take great care with every account during the peak tax season. However, in the quieter summer months, accountants will have more time to focus on your accounts. This means that they won’t be calling you or hassling you for any outstanding information as often as they would in October time. It also means that you get to talk to your accountant when you call them up, unlike at peak tax season where they are not in a position to speak when you call. You might have to wait to get a call back.

You give yourself a bit more freedom as well as your accountant by doing your tax return earlier than usual.

2. You’re Aware of your Tax Liability

By doing up your accounts well before the October deadline, you know exactly how much you will have to pay. Even though I always recommend monthly management accounts, I know some business owners just get busy and only do annual accounts. Knowing how much you owe will allow you to plan payments.

3. More Time for Planning

Following on from the point above, having your accounts done early allows you to plan for this year and for next. I have some clients who actively pursue a sales campaign to bring in cash to pay for the tax that is due in October.

Other clients like to plan ahead so knowing your balance for this year and estimating it for next year gives more than a full year of tax planning. Those vital months could make a huge difference in cash flow and budgeting.

4. It’s Off the To-Do List

I know it sounds like a bit of a limp benefit but just think about it. How many things are on your to-do list? How is your sense of over-whelm? If you give your documentation to your accountant, you can do what you do best – run your business. Sometimes having things on our to-do list makes the job seem much bigger than it is. Start early and there will be no stress later in the year.

5. You avoid the unknown

While we often don’t like to think about it, illness and family emergencies happen. You need to file your tax returns on time or you get fined. It’s as simple as that. To avoid a situation where you may find yourself ill or unable to gather all the information to pass to your accountant at the right time, simply do it now. The summer time is quieter for a lot of businesses so take advantage. Spend an afternoon with your book-keeper, your accounting team or with yourself and gather all the necessary data.

Begin assembling all your relevant financial documentation – bank statements, receipts, invoices, emailed receipts and cloud based receipts. Take the pressure off yourself and do it this month or next. Summer will fly by and next thing it will be the 1st September.

If you’d like to talk to us about anything in this article, please feel free to contact us. We can help keep your business in shape this year.

AG Associates is an accounting practice that specialises in affordable accounting and payroll solutions for the SME business owner. It also offers training on accounting software. For further information please contact Angela at Unit 11, Eastgate Way, Little Island, Cork. 021 4824723 or angela@agassociates.ie