4 Tax New Year’s Resolutions You Should Make

Millions of people make New Year’s resolutions every January.  Many of us aim to take more exercise or to lose weight but millions also resolve to change their financial behaviour in the coming year.

In 2010, The Observer reported that ‘more than half of us are planning new year’s resolutions, according to research from GoCompare.com.  And alongside losing weight and taking more exercise, fixing our finances is top of the list.’

While saving money and spending less are two great ways to help get your finances in order, ensuring you are on top of your tax is also a great way to keep control of your cash.  Keep reading for four tax New Year’s resolutions you should make in 2012.

Register for online tax returns

If you have to complete a Self Assessment tax return then you should consider registering for HM Revenue and Customs’ (HMRC) online service.  This is the alternative to submitting your tax return on a paper form.

There are lots of benefits to submitting your tax return online.  The main one is that you get an additional three months to submit your return: 31 January instead of 31 October.  In addition, you will receive an instant acknowledgement, your tax return will be processed more quickly and your tax is worked out for you as you are completing the return.

Open a savings account for your tax money

If you face a tax bill at the end of the year, it is a good idea to build up a cash lump sum throughout the year.  This ensures that you have the capital available to pay your tax bill and that you’re not left in a position where you can’t afford to pay what you owe.

It’s a good idea to open a high interest savings account – perhaps even a tax-free Individual Savings Account (ISA) – where you can save up smaller amounts as you earn money throughout the tax year.  You’ll benefit from a good rate of interest and be able to save up enough to pay your tax bill when you receive the payment demand.

Check you have the right accountant

When was the last time you thought about changing your accountant?  If your accountant does a great job for you at a competitive rate then you may be happy with them.

However, if you’re not 100% satisfied with your accountant, why not consider switching?  There are thousands of accountants in the UK that specialise in different business areas and charge different rates.  You may get a better service, more specialist knowledge or a lower bill if you switch to another accountant.

Improve your tax knowledge

Tax is a difficult subject.  With so many rules, regulations and requirements it can be tough to get your head round everything you need to know.

However, there is a lot that you can learn about the tax rules that affect you and your business.  Only by understanding the system can you maximise your deductions and reduce the amount of tax that you pay.

Sites such as Tax Fix have a wealth of resources designed to help you understand your tax better.

3 comments

  1. Gemma Lee says:

    I have been working in the UK and have not got indefinite leave to remain yet. On my visa, it says “no recourse to public refund”.

    As far as I understand, income tax are partly used to provide benefits by the state. I am not entitled to most benefits and neither do I have a citizenship. The exceptions are benefits that are based on National Insurance contributions.

    The question is, why am I required to pay the same amount of tax? Or do I get a different tax-free allowance? Thanks.

  2. Tax Fix says:

    John – that is great to hear. We have heard a few stories of people jumping ship and getting either a much better deal or much better service/advice (or both!) from a new accountant.

    Does anyone else have experiences of switching accountants?

  3. John AR says:

    Your advice to shop around for a new accountant is spot on. I was fed up with the lack of replies I was getting from my accountant last year so I went looking for a new one.

    My new accountant is keener, understands my business better and has helped me to save a fortune in tax. Even though I pay a bit more it’s been well worth it and I would encourage others to do the same.

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