Many people put off completing their self assessment tax return and often, it is not completed until quite late in the year. We are now almost 3 months into the new tax year, and now is an ideal time to ensure that your tax affairs are up to date.
There are many reasons why completing your tax return early may benefit you; here is our top 6.
1. Know your liability
File your tax return now, and;
• Be aware of your tax liability earlier;
• avoid last minute panics and the potential for HMRC interest and penalties;
• It may be possible for tax owed of up to £3,000 to be collected through your salary or pension; and
• Give yourself longer to budget for payment. (Filing your return early does not mean paying your tax earlier.)
2. Get your repayment in your account
If you are due a tax repayment, submitting your return early will result in receiving the repayment quicker, particularly as HM Revenue & Customs are less busy over the summer months.
3. Reducing your payments on account
You may be required to make payments on account based on your previous year’s income tax liability. Calculating your tax liability early will give the opportunity to consider reducing the July payment on account, if your income has reduced.
4. More time for tax planning
Preparing your return early allows time to consider and implement any tax planning opportunities for the following year.
5. One job done
Many people do not like completing their tax return and may put it to one side. Filing now, gives one less thing for you to think about.
6. Don’t get caught out by the unknown
If you do not file your tax return information until the last minute, unknown factors such as illness, mislaid information or disruptive weather could add additional stress. Being organised in dealing with your tax affairs avoids the further headache of missed deadlines and HMRC interest and penalties.
If you have anything you would like to discuss with a member of our tax team, please call 01246 559955 or 0114 2671617. To arrange a free consultation, please complete our online enquiry form and a member of the team will get back to you.