I had a brief conversation with my accountant yesterday morning in which he explained how much money I had to pay the tax man.
It was an eye watering sum, and one of the only ways to reduce my liability is to pay a lump sum into a pension, which I have been doing for a few years now.
I am sure in years to come I will be delighted with whatever funds become available from said pension. But in the meantime, in November 2021 and in November of every year, a self employed small business owner like myself can encounter a significant cash flow problem this time of year.
But I simply must find and pay the money.
It could be worse, of course.
If I had no liability, it would mean I wasn’t making any money and I have had plenty of those days since I started my first business in December 1986.
When I think about it further I recognise that I am simply paying now in one lump sum what most persons pay on a weekly basis in the course of the year for they pay as they go. There is a lot to be said for it, and I could see a situation where the small self employed person would simply not have the money available to pay.
We all know how easy it is to spend as we go and fail to put funds away for a future liability. And life gets in the way, too, with all sorts of emergencies and crises. If you have a sick child or a family emergency of some description it would be easy to spend whatever resources you had available and forget about obligations to the Revenue Commissioners, or anyone else for that matter.