It is certainly tempting to wait until the eleventh hour to submit your Self Assessment Tax Return, and according to HMRC statistics, there is a surge of submissions close to midnight on 31 January each year. Here are 3 reasons why you should file your tax return early!
1. Timing is everything
Rather than rushing around a couple of days before the deadline to get your books in order and seeking out receipts from more than a year ago, if you start and organise early, you will hopefully avoid the annual panic that comes around every January!
2. Working on HMRC timescales
If this is the first year you are completing a tax return, you may not realise that it takes 1-2 weeks to register with HMRC, who send you a PIN code via post, which is required to submit your return.
Remember, if you miss the 31 January deadline, you will be immediately penalised with a £100 fine, so it’s worth getting organised now!
3. More time to budget and pay your tax bill
Did you know that you can submit your tax return as early as April after the tax year in question, for example for the 2018/19 tax return due by the end of this month, you could have completed this as early as April 2019!
By getting organised and completing your tax return as early as possible, you are gifting yourself more time to plan and budget for your tax bill, which is still due by the 31 January deadline no matter how early you submit your tax return!
I wish you had told me sooner, I think I am going to miss the deadline, what can I do?
The good news is that you won’t be hunted down by the taxman or the police with a late night knock on your door – phew! – although you will incur an immediate £100 penalty fine from HMRC as well as interest on any unpaid tax you are due.
The best next step is to complete and submit your tax return as soon as possible if you miss the 31 January deadline as the penalties will only keep going up. If you want to know what penalties you are liable for, HMRC have a handy calculator to check.
If you’re a sole trader or director of a Limited Company, we would be happy to help you through the self assessment process and get your tax return submitted as soon as possible. We may even be able to help you reduce any penalties you have incurred if you have a good enough excuse.
Please get in touch to see how we can help.