For many small business owners, the festive period represents a chance to briefly down tools and get some respite from the rigours of self-employment.
But in addition to being an opportunity for some well-deserved downtime, the Christmas holidays can also be a great chance to take advantage of a quiet period in your business and catch up on some admin. And one of the important, yet tedious, tasks that business owners are increasingly choosing to tackle over the festive break is the dreaded tax return.
Last year, 2044 people filed their self-assessment tax return on Christmas Day – a 13 per cent increase on the previous year – while a further 5,402 people ignored the temptation of the sales and chose to file their tax return on Boxing Day instead.
Although it might not be the best time of year for everyone, there are some great reasons why you might want to think about tackling your self-assessment over the festive period if you get the chance. Here, Emily Coltman gives her four top reasons for doing so.
You may have more time and fewer distractions
Many businesses face a slight slowdown during the festive season – especially on Christmas Day and Boxing Day when clients are usually having a break too – so this can be a good opportunity to get your admin done and out of the way in time for when business picks back up in January.
Whether it’s gathering your figures together in order to get your Self Assessment started, or making some headway with filling out the forms, you’re likely to get more done while your clients are taking some time off and the phone isn’t ringing off the hook.
You should be less likely to make mistakes
If you’re rushing to pull everything together in the weeks or days leading up to the self-assessment filing deadline of 31st January, you’re far more likely to enter incorrect information or accidentally forget to include something important.
Getting started nice and early over the festive period means you’ll save yourself the stress and worry of trying to pull all your figures together in a hurry. And even if you do end up entering incorrect information, you’ll still have plenty of time to change and resubmit your tax return before the deadline.
You could take time out from Christmas stress
Christmas can be a stressful time of year, full of family squabbles and tensions over everything from presents to the turkey dinner. And for many people the only respite is to retire to the couch and pretend to watch The Great Escape or It’s A Wonderful Life for the umpteenth year in a row.
Self Assessment may not be the most enjoyable task in the world, but when Christmas starts to feel a bit much, it’s a great reason to excuse yourself from the festivities and have some quiet time away from the hubbub – and the best part is you’ll make some progress on your tax return while you do it!
You’ll have a more productive (and peaceful) January
At the start of a new year, many freelancers and small business owners make resolutions and seek to implement long-lasting changes in their businesses. For you, that might mean reviewing your profit margins, taking on new clients or branching out into new markets – but it’s unlikely that you’ll be able to make that new beginning with the prospect of an outstanding tax return looming in the background.
However, if you complete and file your tax return over Christmas, you’ll be able to hit the ground running in January and concentrate all your attention on getting 2017 off to a great start!
Emily Coltman is chief accountant at FreeAgent.