Although we are only just into the new tax year and it may be tempting to put off preparing your self assessment tax return until later in the year, the summer might actually be the perfect time to complete your tax return and get your tax affairs up to date.
In my first article since joining Hawsons as Senior Tax Manager I highlight the benefits of filing your tax return early with HMRC. This is particularly relevant as many taxpayers will by now have received a notice to file a self assessment tax return for the 2015/16 tax year.
1. Peace of mind
Submitting your tax return early gives you one less thing to think about and could give you peace of mind during the hectic Christmas (and New Year) period. Avoid the stress of last-minute filing by sorting it out this summer.
2. Avoid incurring penalties and interest
The deadline for filing is 31 January (or 31 October for paper returns); miss it and you’ll automatically be fined the infamous £100 penalty. Longer delays will result in further and more severe penalties from HMRC, so filing your tax return early will make sure you do not run the risk of missed deadlines and HMRC penalties.
3. Know what tax you owe and plan ahead
Filing your tax return early does not mean paying the tax that you owe at an earlier date. Find out where you stand at the earliest opportunity and give yourself time to budget for payment and consider tax planning opportunities. For example, it may be possible to reduce your July payment on account if your income has reduced. In addition, if the return is filed early it may be possible for tax owed of up to £3,000 to be collected through your salary or pension.
4. Get a quick tax repayment
If you are entitled to a tax repayment, you should receive this once your tax return has been submitted and processed by HMRC. It is therefore well worth filing your tax return early if you’ve overpaid tax as it will enable you to receive the tax repayment sooner. In addition, as HMRC do not deal with as many tax returns during the summer months you are likely to receive the repayment much quicker.
How we can help
Our experienced personal tax team can help you with the preparation and submission of your self assessment tax return. We can often save you a great deal of time, worry and money by taking care of your tax return for you. Please do get in touch.
More from our tax experts
You can find all of our latest tax articles and tax resources here.
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