Putting aside all the guilt connotations of the word “should” – and the fact that as accountants we are bound to say YES – there are a lot of good reasons to file your tax return early.
Its human nature to let things you don’t like get pushed down your to do list, but it could actually be easier and save you time to get on and file your tax return early. You will have more time to gather all the information whilst it is fresh in your mind rather than racing around at the last minute when details might be forgotten or paperwork misplaced.
Give yourself some certainty in an uncertain world
The last year and a bit have been pretty challenging. We’ve all had to cope with a lot of uncertainty. Don’t add to that uncomfortable feeling by leaving your tax bill a mystery until the last possible moment. The earlier your tax return is filed, the sooner you know what tax you will have to pay, and the more time you will have to find the money to pay it.
We are already seeing some really surprising tax bills when our self employed clients have their Self Employed Income Support Scheme grants added to their taxable income. Make sure you know exactly where you stand.
July payments on account
For those of you stuck in the world of payments on account, the next payment falls due on 31 July. If your income has gone down year on year, which could well be the case thanks to COVID, then you may not have to pay as much as expected. If your tax return is filed before 31 July then you will know whether you have to pay the whole of the next payment on account.
HMRC are being slow to pay refunds
The word on the ground is that HMRC are battling with more fraud than ever before. They are getting slower and slower at paying out refunds as a result. If you are going to be owed a refund then the sooner your tax return is filed the better. Some clients are seeing delays of over 3 months!
You won’t have to pay your tax any earlier
One common misconception is that filing early means you will end up paying early. You don’t need to worry – any tax due will still only be payable by 31 January.
Peace of mind!
If you are concerned about issues that may need addressing you are far better to get your tax return filed early so any issues can be resolved before HMRC get busy later in the year.
Christmas festivities won’t be affected by the looming tax return deadline. You will be free to enjoy the Christmas period with peace of mind.
Starfish are here to help throughout the year. Once we have the necessary information we can prepare your tax return well in advance of the deadline. Don’t give yourself unnecessary worries, there is enough to deal with this year already!