Although, for most practitioners, January is brilliant month for invoicing, it comes at a heavy cost. Many smaller accountants are required to burn the midnight oil in order to ensure as many client’s tax returns as possible are filed before the 31st.
Leaving aside the issue of charging higher rates for late comers, does January see the end of it? Firms will no doubt be short of breath and looking forward to an easier time of it in February but our dear friend, George Osborne, has other ideas this year.
In particular, the introduction of the 7.5% dividend tax on certain basic rate payers from 6 April 2016 means that it is imperative that small limited company reserves and shareholders basic rate bands are compared to see if final distributions need to be made before the end of the tax year. This is the last time we can distribute available profits without incurring an additional income tax liability (as long, of course, as the shareholders income does not exceed the basic rate band).
In some cases firms may need to prepare management accounts to quantify profits, and estimate corporation tax liabilities for 2015-16.
Busy, busy… Larger firms may see this activity continue until the end of March.
Accountants will also need to fit in a “pre-tax year end review” with clients, and perhaps, after 5 April 2016, practitioners can take a much needed break.