Today’s the day to pay your tax bill!
31st January is a day most business owners dread.
The day business owners pay their tax bill, grudgingly.
When we were employed (and paying through our employer’s PAYE system) we very likely didn’t pay much attention to the amount of tax we paid, but now we’re in control of what we earn and spend, we’re very attentive to tax!
Whilst it’s important to be tax-efficient, we must remember it’s illegal to avoid tax, which I’ve spoken about in a previous blog (Your Business Tax Strategy), but it’s also important to realise having a ‘thing’ about paying tax is actually having a negative effect on your finances and disempowering you. In other words…
Paying tax empowers you!
I talk more about this in chapter 11 of The Magical Mix of Money & Tax but for the purposes of this blog consider two self-employed businesswomen. One who has a profit of £15,000, or one who has a profit of £50,000. The former (£15k profit) will pay very little tax (assuming she has no other income), the latter (£50k profit) will have a much larger tax bill than the former. But that’s not the only difference!
The businesswoman with profits of £50,000 will be able to afford to take her kids to Disneyland without relying on her partner’s income or she could have five holidays a year to visit her friends all around the world, or maybe she just wants to save up for her retirement so she knows she is secure and looked after without relying on anyone.
Paying tax, assuming the business is being tax-efficient, means you’re in control of your financial freedom. You can either choose to rely on your government for benefits or you can take control of your own financial destiny by paying tax. It’s your choice.
What you think, is always your choice but I encourage you to make it work for you, instead of against you.
You would think that a book with “tax” in the title would be dry and difficult to read. Well, unbelievably, Helen has managed to write it in such a chatty style that it is easy to read, very accessible, and dare I say, even enjoyable! Importantly, it also covers four main areas which are exceptionally helpful if you are self-employed. First, helping you acknowledge and overcome any resistance you have to understanding your finances, tax and tax returns. Second, some practical solutions to finding time which were very well explained. Third, what you need to know and do to complete your tax return, broken down into short, simple steps. And finally, the bigger picture – how all of this helps you become more successful financially and why you should feel good about paying lots of tax. This was certainly a shift of mindset for me and a powerful perspective.” Anna Davies, Achieve Balance