We always recommend thinking about doing your tax return as early as possible, which is from the 6th of April onwards. Here are some reasons why you should think about completing your tax return early. If you want to get ahead and complete your return as early as possible, we can help you with our self-assessment tax return service. Speak to us about our service during a free consultation call which you can book using our contcat online form.
· You will get your tax rebate from HMRC faster (if aplicabale ) – When you’ve filed your self-assessment tax return, depending on MANY factors, processing your tax refund can take anywhere between 5 days – 8 weeks (and in some reported cases, even longer!) The main reason for delays in issuing your refund is that HMRC are extremely busy, and this is most often the case in every January. That’s why one big advantage to completing your tax return early is that you’ll beat the long queue if you’re expecting a rebate.
· Longer period to budget for the tax liability – Once you’ve calculated and submitted your tax return, you’ll know exactly how much you need to pay to settle your tax bill. This means that the earlier you complete your tax return, the more time you’ll have to save up for your bill before it’s due to be paid on the 31st of January. HMRC charge you interest on all late tax payments (starting from 5% of the tax owed) so it’s definitely worth ensuring you can pay your tax bill on time. Leaving it to the last minute may result in a nasty shock and leave you scrambling to find the funds to pay. Another benefit of filing early is that, you can choose to have your tax liability collected through your tax code on any PAYE income you may have. This means your tax is automatically deducted from your salary or pension and so you won’t have to worry about payment.
· Enjoy your time without a nagging timebomb – Sure, you could leave your tax return to the last minute and try to ignore it for most of the year (just be sure not to ignore it completely and forget!). Unfortunately, the self-assessment tax return deadline is at the end of January, right after Christmas and the New Year and so many people will start to feel anxious during a time that’s meant for festivities and celebrations. Instead, why not get it done and out of the way sooner in the tax year? This will allow you to relax knowing it’s all sorted and get on with everything else you’d rather be doing.
· Avoid mistakes and give yourself a chance to correct them in time – Another thing that occurs when you leave your tax return to the last minute is mistakes. This could be a mistake in your calculation, forgetting to include income or expenses, or claiming for tax relief that you’re ineligible for because you didn’t have the time to check properly. When you’re rushing and short on time, it’s unlikely that you’ll check things through thoroughly. You’re more likely to just want to submit it so that you know it’s been done on time, but this could end up costing you. HMRC can charge up to 30% of the tax owed if it finds that you have not taken reasonable care to complete your tax return correctly. What’s more, if you file early enough before the deadline and realise you have made a mistake, you still have time to correct the tax return for that tax year.
· Give yourself enough time to get everything you need – Filing a tax return no doubt takes time, but most of the time is often spent preparing documents you need in order to complete it. You may need to collect bank statements, dig out receipts and invoices, check figures on payslips or pensions slips, as well as check the dates for all of these. The earlier you start to do this, the more time you’ll have to sort through these documents. Don’t forget that some of these may not be readily available if you have to request them from your bank, or you may have misplaced them and so need to ask for new copies.
· Don’t miss out on securing a mortgage or loan – When you’re applying for a mortgage or a loan, time is always of the essence. Unfortunately applying for them can be a long and arduous process. For those who are self-employed, the process can be made even more challenging – as for a mortgage in particular – you will need an SA302 tax calculation form as proof of your income and earnings. To obtain this however, you will need to have completed your tax return for the most recent tax year. If you leave your tax return until when you need your SA302 form, then this will delay your application, as you can only print it out for the HMRC portal 72 hours after you have submitted it.
· Get more time to implement tax planning strategies – A big advantage to completing your tax return as early in the new tax year as you can is that you’ll be able to put in place tax saving strategies right away. For example, if you were to complete your 22/23 tax return on 28th April 2023, you would know what your 23/24 tax liability is. If you predict that your 23/24 tax year will be similar in terms of income, then you’ll be able to put tax-saving strategies in place.
· Be able to reach HMRC instead of waiting in a long queue – HMRC offer a helpline to people who are struggling to complete their self-assessment tax return, but this helpline gets busier and busier the closer it gets to the 31st of January. Save yourself the time and stress of waiting in a long queue for up to many hours – or worse yet, the helpline crashing – by speaking to them during quieter periods of the tax year. Not only that, but you may even find that the person on the other end of the phone may be more helpful as they’ll be under less pressure to take as many calls.
· Find the right accountant that will provide the support you need – It is not uncommon for some people to leave their self-assessment tax return to the last minute, only to find that they get stuck and could really do with some help. This may mean that they turn to an experienced accountant who will be able to complete their tax return for them. However, depending on how late you leave it, you may find that many accountants will not guarantee they’ll be able to do it by the deadline as they will prioritise their existing clients first. Not only that, but you’ll have less time to find the right accountant for you and may end up overpaying or find a deal that’s too good to be true.