Business owners who are sole traders will probably have an accounting year which ended on 31st March. This date is in line with HMRCs tax year which ended on 5th April.
If your accounting year ends on 31st March you should now be putting together and finalising your accounts for the year so that your tax return can be submitted as soon as possible. The sooner you submit it the sooner you will know how much tax you will have to pay by 31st January 2016 and can plan and save for this.
In July most people who have submitted a self assessment tax return will have to pay their second payment on account for 2014-15. If you submitt your tax return before this second payment on account is due and the tax you owe is less than last year you may find that you will be able to reduce your payment on account thereby aiding your cashflow.
However if the tax due is more than estimated you may have to pay a higher payment on account in July but it is your responsibility to pay an increased payment on account if this is the situation.
We have already submitted tax returns for individuals whose earnings have changed. They are already in possession of their refunds and their second payments on account are cancelled.
So if you want to get back any overpaid tax or reduce your payment on account you should be putting your accounts together now and submitting your tax return.
If you need any help to get your accounts organised we can do that for you so give us a call.
