1 December 2016
As the end of December approaches we are heading for one of the busiest periods in terms of on-line filing for 31 March accounts and of course the personal tax return deadline at the end of January. Leaving the preparation of both documents until the last minute can have detrimental effects of everyone.
Firstly, if you use the services of a professional, such as an Accountant, it is likely that you may not be alone and therefore this puts them under pressure to prepare accounts quickly which may mean that errors could occur. Often there can be missing information when provided at the last minute and this means that the deadline date becomes more pressured to achieve.
Secondly, both limited company accounts and individual tax returns have a tax consequence, usually payments that need to be made. By leaving the accounts until the last minute this means that you do not have the opportunity to plan appropriately in respect of reducing the tax or the cashflow impact of the payment needed which is then due imminently.
Lastly, by pushing the boundaries you run the risk of the accounts or tax returns not being filed on time and this means that in both cases Companies House and HMRC are likely to impose penalties which can be significant especially for repeat cases. This is effectively the same as burning money as there is no need for either a company or individual to suffer this penalty if early plans and preparation is made beforehand.
In order to ensure that you have plenty of time to file your accounts and tax returns you should be maintaining records on a regular basis so that once the year end or tax year has finished you are then able to put your records in to be completed. This means that the business is more likely to be able to plan and very likely not to incur unnecessary costs. Up to date financial figures also allow the business to become more efficient and use this data to take the business forward.