It may be tempting to put off preparing your self-assessment tax return until later in the year. However, there are many benefits of submitting your tax return early and keeping on top of your tax affairs.
Peace of mind
Christmas can be a very busy time of year so we encourage everyone to submit their tax return before the hectic Christmas period. This will also help to avoid a stressful January as you rush to get your tax affairs in order and file your return by the 31st January electronic filing deadline. Rushing your tax return may result in mistakes and could lead to penalties.
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 ensure you do not run the risk of missed deadlines and HMRC penalties and interest.
Know what tax you owe and plan ahead
If you file your tax return early, it does not mean you need to pay the tax at an earlier date. If you find out where you stand early, you can give yourself time to budget for paying the owed tax and to consider tax planning opportunities. For example, it may be possible to reduce your payments 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 the tax code operated on your salary or pension.
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 refund 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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Craig Walker is a Tax Director at the firm. He advises on all matters tax related, both corporate and personal, including income, capital gains and inheritance. For more details and advice, please contact Craig on [email protected] or 0114 266 7141.