How Many Years Have You Spent Resenting Your Self- Assessment Tax Return? My Answer is 4

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Picture the scene: It’s 2015, my first year of proper self-employment when I’ve been lucky enough to hit above the income tax threshold and therefore file my own self-assessment tax return.

I have a one-year old and a three-year old on my own, so when you combine single motherhood with trying to grow a full-time business both my time and mental capacity at maximum.

Too maximum for the tax-mum.

That first year of my Self-Assessment tax return was an unmitigated disaster. Back then, newly single and living on my own for the first time, I was scared of my own shadow, let alone HMRC. The taxman should have been a Luther villain for the amount of scared stress dreams I had about him.

“By the time I mustered up the courage to address the scary monster lurking in the corner of my mind and inbox – my tax return – I was in trouble to the tune of about £800”

Long story short, I was so scared of my tax return the first year that I didn’t do it, instead ignoring the letters and hiding all my receipts in my wardrobe in the hopes that if I couldn’t see anything relating to my tax responsibilities I wouldn’t have to deal with them. By the time I mustered up the courage to address the scary monster lurking in the corner of my mind and my inbox it was June – a whole 5 months after the assessment deadline – and I was in trouble (and by trouble I mean late fees) to the tune of about £800.

It felt horrible. I felt like I’d let myself down, my kids down, my business down. It was such an unnecessary expense to suffer in the first year of trading, so much so that I almost jacked in the whole self-employment thing for an altogether safer and more stable job.

But I didn’t, and 4 years in to my business I can now submit those bad boys with my eyes closed. OK, so not with my eyes closed, but I can at least submit my return a month before deadline with both a thorough understanding of the tax I have to pay and the money in the bank to pay it. Being so focussed and interested in the financials of my operation is empowering, yo!

Last year I joined the ranks of Xero, online accounting software that gives you an easy web-based way to run your business accounts. So easy that even me, the person who still counts on her fingers when the need for basic arithmetic arises, could use it.

Xero - self-assessment tax return

This is the first time I’ve used Xero to complete my Self-Assessment Tax return, and I most certainly didn’t miss my cumbersome tax return processes of the previous years. Back then, when I’d got over the fear of my lurking receipts, I’d print off a years worth of bank statements and spread them out on the floor of my living room, going through the numbers month by month as I reconciled the payments with my receipts (which are always jumbled together either in an envelope or in the driver’s side pocket of my car) and income/expenditure spreadsheet.

But now, working with Xero, although there’s slightly less fanfare when it comes to tax return time I do my book-keeping as I go, keeping up with my expenses and transactions online.

Xero has a mobile app which means I can log my expenses and costs as they occur, keeping them recorded in a central place so all my numbers are accounted for and secure.

And most definitely not floating around in my car.

I think for me this has been the most important part of cloud accounting: paper receipts are snapped and uploaded, meaning I never have to kick myself over a lost expense when it comes to tax return. And using OCR (Optical Character Recognition), all receipts are logged and data pulled through to my return automatically.

If you’re stuck counting on your fingers at self-assessment tax return time, there’s a lot of value in moving your Small Business Accounting to Xero. I can hugely recommend it for freelancers or Small Business owners who, like me, would rather spend as much time as they can on the fun of creating rather than counting.

You can have a look at Xero’s guide for sole traders here, or if you have any questions about my experience with their software feel free to leave them below!

Huge thanks to Xero, software I use and love, for working with More Than Toast on this advertorial. 

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