Tax planning doesn’t have to be taxing… just follow my steps
If you’re reading this and you’re struggling with tax planning, don’t panic!
Do you have the money? If not, call HMRC and speak to them to see if you can arrange a payment plan – don’t bury your head, it will make you feel worse and not help anyone. You really need to call them however difficult you may find it, you’ll be pleased you did.
Despite what others may say HMRC are humans and will engage in a conversation with you if you don’t have the money, you may be able to arrange a payment plan with them, so you pay over a number of instalments.
Now if you have paid but you always find it a challenge let me suggest a couple of options to make future payments easier.
Step 2 in The Money Plan book is ‘Get organised’, know what you need to pay, your next payment is likely to be due by the end of July coming up, then again in January.
So you have payments every 6 months.
Either put a payment plan together yourself or speak to HMRC and prepay your tax.
January savings – divided your current tax bill by 12 and make an automatic payment from your Bills Account each month into the Tax Account (a savings account you name Tax!).
July savings – divide your expected tax bill in July by 6, and make an automatic payment from your Bills Account to your Tax account each month. (from July once the payment is made you can reduce this payment by half as you’ll have 12 months, twice as long to save it for the next July payment.)
You will then have saved an approximation of the tax bills that fall due, if you’re growing your business profits you’ll have a shortfall which you’ll need to make up and if your profits are falling you have a surplus you can use as savings.
This will help you plan your cash flow and cash flow is so important to any business.
Here’s a link to HMRC’s Self Assessment information