|Extra savings accounts can help you pay for fab new cameras!|
HMRC aren't patient types - if your tax return isn't in on time then they fine you £100 right away, and then interest on the amount you would have been due to pay. Late paying a demand for tax? That'll be more interest then. On the other hand though, you have from April 6th to January 31st to complete the tax return - that's 9 whole months. There can't be a person in the world whose tax affairs are so complex that it takes them 9 months of solid graft to get a tax return filled in, can there now. I was late doing mine this year - it wasn't done until the first week in May. Yes, that's late by MY standards, but not by theirs - they get enough of my hard-earned, they're not having any more by way of fines or interest, thanks!
To me it's just about planning - I know that the tax has to be paid, in the same way that I know Christmas falls on 25th December every year - hence it doesn't come as a nasty surprise. We set aside money every month to put against Christmas presents for the family, I personally put aside a sum each month to cover MrEH's, and my close friends Christmas & birthday presents, too. I don't want a rude shock in January when I "suddenly" have to find money to cover Christmas - setting that money aside means that it's paid for over the year, rather than in one lump, in effect. January also seems to hold another shock for a lot of folk as they get their December pay in the bank earlier than normal. MrEH gets paid early as well, but do you know what - WE PRETEND HE HASN'T BEEN! I know - radical eh? It's that simple though - we ignore the money until the time it would usually land. We wouldn't usually have his salary to call on until the last day of the month, so why treat it any differently just because it's in the bank account ahead of time?
|Learn to look ahead...|
You can take your planning further even than that too - if you know you want to go on a holiday next year, costing £1200, then it's not rocket science to know that if you put £100 a month into savings each month until you go, that's the holiday paid for and no nasty surprises to come on the credit card when you get back. Likewise, work out what your car costs you to run over the year - tax, insurance, servicing, MoT, and add a bit for depreciation, tyres etc - and set aside that amount every month too - just imagine how good it would feel to pay your insurance in one go rather than having to spread it over 12 months - it's cheaper paid in one go, too!