Three barriers to punctual tax form completion

||

Missed tax deadlines result in chasing from HMRC and potential financial penalties, so why is it that so many businesspeople fail to adhere to them?

January 31 is the deadline for Self-Assessment Tax Return, and the last date on which money owed from the previous tax year’s income needs to be paid, but hundreds of thousands of Brits are hit with a £100 late filing fee every year, with young men recently revealed to be the sloppiest group in meeting deadlines.

HMRC has released its annual list of poor excuses for late filing, ranging from schoolboy protests like a pet eating the return form, to the truly bizarre “Barack Obama is in charge of my finances”. In reality, deadlines are usually missed because of a disorganised or unprofessional approach to accountancy. If you struggle to keep up to date with the taxman, here are three stumbling blocks you might recognise.

1. Lack of knowledge

Business owners become successful because they have a particular field of expertise or interest, but unless you’re an accountant yourself, this is unlikely to be financial management.

Limited understanding and confidence in knowing what to declare often leaves people at a loose end, especially if they do not know where to turn to for assistance. This results in businesses not having the assertiveness to file returns quickly and accurately.

2. Lack of preparation

Accountancy is always made 10 times easier if it’s carried out as you go along, and this is something HMRC has begun to address with its Real Time Information demands. Humans are prone to procrastination though, and both business owners and self-employed workers frequently make life difficult for themselves by having to go through a backlog of old receipts and emails. This is compounded if it turns out that some vital information has been misplaced.

3. Lack of time

When concentrating heavily on your business, it’s easy to let bookkeeping and financial management fall down the list of priorities. Many directors simply don’t have the time to run their business in the way they would like to while simultaneously managing their company’s books, let alone setting long-term financial strategies.

One way to address all three of these issues is to alleviate the pressure on your own time by using an outsourced finance and accounting service. Knowledge, preparation and time to devote to your business are all factors they have in abundance, and it can help you control your business while still remaining in HMRC’s good books.