When it comes to the HMRC, there are some things I find painful. Their user experience on their website. Communication. Trying to register as an employer (which took me approx 50 billion years. Twice.).
But I actually love their current radio ads which focus on the inner peace you get once you’ve submitted your tax return. They’re not wrong!
In my experience, submitting is half the thing. There’s also the emotional process and the financial practices that go with it.
What’s done is done
Working on your tax return is like stepping back in time. You have to look at business decisions from 18 months ago and remember what happened – good and bad. You get to celebrate successes, for sure, but it can also be challenging to remember the things you thought would work and didn’t.
So remember, what’s done is done. You did your best (and PLEASE make sure you celebrate an awesome year and all the things that went well), and you’ve learnt so much since 30 March 2016. I know you have.
You’re not the only one
Whether you’re looking at no tax bill because you made no profit, or you’re looking at a huge tax bill that you can’t pay because you haven’t put the tax to one side, please know that you’re not alone. Hundreds, probably thousands, of businesses have been in the same place as you.
If you can’t pay your tax bill, get in touch with the HMRC to sort out a payment plan. It’s possible. They just want to know when you’ll be able to pay it. No judgement. No shame. You’re not alone, and you’re not “bad”.
If you didn’t make profit, you probably laid some good foundations for the future. Again, no judgement, no shame. You’ve got this.
Love your business afresh
Tax season is a great time to review your current financial practices. I know I am! Here are some ideas:
- Set a weekly money date to keep up with your bookkeeping. When this is part of my routine, I easily make better business decisions and worry less. Find a morning or an afternoon and put an hour or so aside – whatever feels good to you. Track incoming and outgoing. File the papers.
- Calculate and put aside your tax. 25% of your income is a great number to put aside for tax. Disclaimer: I’ve done this for one year, and struggled to do it this year. I’m resolving to use my savings account to do just this. I’ll need a spreadsheet to tell me how much should be in there, so I’ve set this up, too. I’ll check it when I do my weekly money dates.
- Re-focus your priorities. If making a profit is important to you this year, let it influence your decisions. Not at the expense of happiness or creativity, but there’s something very clear and intentional when you know what you need. (Note: most clients I start working with can put their prices up by 20%. Consider and start there.) If profit has been good, but creativity has been stagnant, re-focus towards creative time and freedom. If you’re somewhere in the middle, do a bit of one and then a bit of the other.
Get support
I can’t imagine not hiring an accountant to do my tax return. First, it means I have very little direct contact with HMRC, which helps my sanity. It also means it’s not on my shoulders and I don’t worry about getting it wrong.
My accountant and recommendation for creative businesses is Amy Taylor. She specialises in NOTHS and Etsy sellers – she knows those systems and how they work. She helps with my sole trader business AND my now big, limited company with VAT. Her team includes specialists, so I know I can email all my little questions when I need to.
She also invoices monthly, so I spread the cost of tax returns, VAT returns, payroll etc, rather than getting caught out.
If you need help, I recommend getting in touch. Tell Amy I sent you. (I’ll get a little gift if you sign up, but I’d recommend her anyway.)
And if you need support creating business plans, re-focusing, working on your marketing strategy, I’m here. One on one mentoring options open up again in February. Let’s crack this thing.
Jenny x
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