Taxing times and false economies

I often meet people who complete their own tax returns. Usually they think that they're saving themselves money.

After all, why pay someone to do something you can do yourself?

There are a few good reasons actually!

One person I know did their own tax return last year. It was their first one. Getting together all the information and filling it in online took them three days. Yes, three days.

Now imagine what else they could have done with that time. That could have been three days in which they earned more money, or even had a well deserved break.

There's more than that. Even after all that time, they still don't really know whether they got their tax return right. They don't know the latest legislation or the reliefs and allowances that are available. They may well have paid too much tax as a result.

So this person has lost time that could have been used more productively, is worried that they might have got their tax return wrong anyway, and may be actually out of pocket. And they did this to save money!

Crazy, isn't it?

That's why we think people should use firms like Accountancy Edge to take care of their tax affairs. We'll free up your time so you can spend it on your business. You will also sleep better at night knowing that your tax return has been done correctly by a professional. So why not contact us today?

Reducing the Income Tax you have to pay on 31 July

If you're in the Self Assessment tax system, then you usually pay tax on two key dates: the 31st of January and the 31st of July each year.

The next HM Revenue & Customs payment deadline is approaching, for the second payment on account for the year-ended 5 April 2013, which is due by 31st July 2013.

As payments on account are estimated based on the previous years figures, it is possible to apply to have these reduced should the tax liability have fallen.

However, in order to do this accurately you have to know what the actual liability is.

There is still time to prepare the return and accounts before the deadline for making your payment on account, and if profits have reduced then a reduction in the payment on account could bring welcome relief.

Even if the payment cannot be reduced, it does not increase – so the advantage is that people know their tax liabilities well in advance and can plan for them without worrying about an unexpected tax bill.

If you know anyone who has a payment on account due this July, but thinks it may be too high, please do put them in touch Accountancy Edge.