Tax return feels
It’s the end of January and all freelancers have one thing in their mind. Tax returns. Today, January 31, as I write is deadline day. (Yes it's another big deadline, too, but I shan't go into that!). You’ve either submitted early, right up to the wire or you are still waiting to submit.
You might be one of the people who hasn’t done it at all and are now wondering what the hell happens.
Worst case scenario, it’s court and prison, right? Yep, I’ve sat there on the 31st January and wondered what happens if I don’t pay the bill in front of me. Genuinely wondered if the next step is prosecution, losing my self employed status... Wondered, while telling myself tearfully I’m a total idiot child-woman with no sense of responsibility, if I am the only one feeling this way. Spoiler alert: course not!
Shockingly (and if it shocks me when it comes to being later with your tax it’s quite shocking) I saw posts in January on groups of people saying they needed to start their return.
I say shockingly, I think it’s shocking to me as I thought I was late by not having finished, let alone not having started. Others were looking for an accountant as the new year dawned.
Me? I have an accountant. One with fancy software. A direct email line to their team. So you’d think I’d have done my tax return in October, right? When they first emailed and told me their charges. Which go up, the longer you leave it.
But I left it, and left it…
I believe there is a whole world of feels behind this reluctance to fill out a form that’s an unavoidable necessity. Like toddlers at bedtime we stamp and scream and use avoidance tactics while knowing deep down we must go to bed. Eventually.
I spent most of January feeling so stupid. Why hadn’t I managed this most basic of tasks?
As the deadline inched closer I had an increased dread of hearing from the accountant - the person I am PAYING to help me with this. That's something to explore as I move forward into 2020, about my relationship with them and whether they’re the right accountant for me. Because you should not be scared to ring the accountant. It should be a relationship, one where you can be open and honest. So, some ‘new accountant’ research to be doing at some point. Actually, a quick tip – search Facebook groups as there are lots of threads right now about accountants that people recommend!
Is avoiding the tax return a journalist thing? I don’t think so. As I’m in a journalist echo-chamber on groups sometimes, perhaps I see more journos speaking about it. But I think the tax return feels hit all self-employed people. There are some journalists who have filed early, for sure. Then I met Zoe Perkins who runs events management company Vodka on Toast, for a podcast interview, and she said she loved it and enjoyed her return! It was her first task of the year on Jan 6. And she pointed something quite important out - if you have the info all prepared it shouldn't be so hard to jump that final hurdle. I still waited a few days before signing and sending back the form to the accountant.
I decided to get some expert input into the matter.
Hannah Martin is the founder of the Talented Ladies Club, a business training company. She told me: ‘I see so many people panicking in January because they have left their tax returns to the last minute! It’s common – and understandable. I used to do it myself. One year I was trying to upload my tax online the day before the deadline and I couldn’t find my online codes. It wasn’t my finest hour!'
'We do it because completing paperwork isn’t fun. It’s also complicated – do we have everything we need? What DO we need? Have we kept all the receipts we need? And what exactly do we need to do? And at the end of it, we get ‘rewarded’ by the shock of learning how much we owe and needing to find the money. So no wonder we’re not champing at the bit to get started on our tax returns. And to add to all these reasons, we’re just not in the habit of doing our taxes – it’s usually an annual exercise – so it’s easier to forget or put off ‘until another day’. This deferral process repeats itself right up until the moment that the pain of confronting the hassle, complexity, and unpleasantness of doing our taxes is less than the threat of receiving a fine for missing the deadline.’
That point about it being an annual exercise is interesting to me as I’d never thought of it like that but it’s true. We have to try and force an annual habit to become a weekly or even daily one. Imagine Christmas once a week…
Hannah’s solution is, she says, to spend 15 minutes every Monday morning updating her accounts before she starts work. ‘That really is all is takes. And I make sure I get everything over to my accountant in plenty of time (which is easy as my accounts are always current and I have saved copies of my bank statements), so my taxes are always completed well in advance of Christmas. Trust me, the calmness and peace of mind are worth it. And once you get into a habit of doing this, it’s so easy.’
That does make me feel a little nervous so I’ll take it on board and park it for now!
Another expert who is an upcoming guest on the podcast is psychotherapist Hilda Burke. She told me: ‘According to Dr. Piers Steel, author of The Procrastination Equation, we’re “entering the golden age of procrastination." A Distinguished Research Chair at the University of Calgary, where he teaches human resources and organisational dynamics at the Haskayne School of Business, Steel asserts that in the past 40 years there’s been about a 300 to 400 % growth in chronic procrastination. According to Steel’s research, "one in four [people] would describe themselves as a chronic procrastinator, [while] over half the population would describe themselves as frequent." Steel went so far as to draw up an equation to define the probability that we will procrastinate any given task.
There's a formula which doesn't want to load into the CMS of my site so I can't share it but it's essentially that procrastination is Time to complete task x Distractibility over
Self-confidence x Task value. Look up The Organised Mind by Daniel Levitin as that's where the equation is from.
Hilda continues: 'Mathematical formulas freak a lot of us out. But in a nutshell, Steel asserts that if what’s above the line (length of time the task will take x our distractibility) outweighs what’s beneath (our self-confidence x the value attached to the task), it’s likely that we will procrastinate. If the former significantly outweighs the latter, then maybe we’ll never even attempt the task.'
We might avoid it because we think it’s going to take AGES, she says.
‘I so often hear clients bemoan the fact that they need to spend the weekend doing their return but when they come back they’ll invariably express surprise that they managed to get it done quicker than they expected. So the key thing here is our perception of how long it will take us, which invariably is higher than what it will take in actuality. In terms of below the line – ‘task value’ – most of us don’t actually ‘value’ doing our tax return. It’s something we ‘need’ to do but doesn’t bring us pleasure. Most people talk of getting distracted from doing their returns which again bumps up the top line. And, unless, we are trained in accountancy, our self-confidence will be quite low about actually completing the return properly. All of which adds up to a high score on the top line and a low score below which means...a big chance we’ll procrastinate!'
‘On a positive note, while many of my clients – and friends – speak with dread of the January 31 filing date, I’ve rarely heard anyone bemoaning the fact that they didn’t file on time so perhaps that’s something to reflect on and to help reassure you that it does ultimately get done!'
For me, my tax return experience brings on the feels because, I think, I let it control me. I carry on with being disorganised and then I wonder why things are, well disorganised. I save payslips haphazardly. I don’t always put invoices in the same place. I file receipts now and then. For example, there’s a P45 for the NEXT tax year just in a load of papers in my desk folders.
I’ve had, this year, to beg people for repeat pay slips (then found out HMRC can send you a PAYE summary!!), got up early (my most hated thing) to find documents, and generally worried about it while simultaneously berating myself for most of the month. A terrible waste of time and emotions.
I wonder if the feast and famine nature of my work over the past year has also led me to put off my return. Because I am ashamed, a bit, that there’s not loads to even send over.
Then I read in the paper that Margot Robbie LIKES doing her taxes!! I felt even more of an idiot. The thing with liking them is we really can’t – and don’t have to – like them. You can’t be a person who loves those sums if you’re not. I don’t think so, anyway. Just like you’ll never like running, maybe, or a certain kind of TV show. I know – and this isn’t being hard on myself, I don’t think – that I am full of excuses. For example, my partner, who is also self employed, puts aside time every week for inputting this stuff - it’s not that hard.
We tax return avoiders are like kids in detention who would rather be down the park and COULD be down the park if we had done what we were supposed to. Like leaving homework till last day of holiday - I used to do this with a 'school quiz' and it was torture!
The biggest piece of advice I can give someone starting out is to do this as you go along. Start a folder TODAY called tax. Every time your invoice or get work, log it. Hell, if you hate spreadsheets do it on a word document or in a notebook. Keep payslips. Keep them and duplicate them and keep them again. If they’re a paper copy then take a photo and start a folder on your phone. At all costs, keep things safe.
This is important firstly for your tax but also your mental health. For me the stress of dong the return in hindsight is worse than the stress of organising it all sooner. I wish so much I’d been more organised and this year I vow to be.
I pledge that I’ll be able to file all my documents in October 2020. That’s still 6 months after the tax year ends!!!!
I’ve starred a folder on my computer, as I want to get beyond the fear of the number I might hear - and I think being more organised might help with that. After all you have to pay it anyway so why not know?
I want to say it’s time I grew up about tax, and keeping my records in better order and it fits with the toddler and teenager analogy. But I don’t want to be hard on us. Instead I’m going to chalk this year up to experience again and then set some goals to help me do better next year. I’m not expecting to turn into some kind of tax return ninja BUT there is scope to make this process a whole lot easier on my mental health.
Start collecting things for the 19/20 tax year now. When? Set a time and date in the diary, like a meeting. Put aside a morning or even a day if you can. NOT A WEEKEND, THIS IS WORK.
That’s so you can go slowly rather than panicking because you have something else to do.
Choose a new accountant. I don’t like working with mine. Too impersonal. So I’m going to scout for a new one via Facebook group chats and recommendations. Part of my problem is I am scared of my accountant like they’re a teacher or mean parent or boss. This is something we can change!
Consider a weekly accounts hour. This is hard for me but my partner does it and hey, he’s zen about his tax return. So.....
Be clearer with payments. I’m paid so many different ways. Can I streamline that? For example, I'm paid in euro, paid PAYE, paid via an online portal, sometimes have to fill out forms, sometimes not.
And the final thing? In 2020 I’m going to find a self employed accountant to interview for the podcast!