Gathering and sorting through information for your tax return can be a bore. It often gets put off until December or even January, and you are left to frantically get everything sorted. For some people, it gets pushed to the back of their mind, resulting in unnecessary stress. Starting the process early can have a number of benefits. Here we will outline some of these benefits and illustrate why you should get your tax return prepared early.
No big surprises
Submitting your tax return early means you will know how much tax to pay well in advance of the 31st January payment deadline. This allows you time to save, if necessary. Since your return covers the tax year from 6th April-5th April, you can technically start your return within the first week of April, as long as you can get access to all the information in this timeframe. This means that it’s possible to know how much tax is due as early as 9 months prior to the payment deadline. That gives you a lot of time to put money aside until the payment is due in January.
Depending on how complex your return is, gathering the information necessary to complete your return can become quite stressful, especially if you have left it to the last few days before the deadline. Starting preparation for your tax return early can help minimise this stress and allow you to feel confident that you have everything you need. The thought of having to complete a tax return can also be something that lingers in the back of your mind for nine months, eating away at you. If you get it submitted early, you can forget about it and save yourself nine months of unnecessary worry. We have so many different things on our minds, why not make sure your tax return isn’t one of them!
Less room for error
Giving yourself more time not only minimises stress, it also means there is less room for error. If you are in a rush there is more chance that figures on your return may be incorrect. Preparing your return early means that it can be checked and checked again until you are confident that the correct figures have been put onto the return. This means you will avoid any penalties for submitting an incorrect return.
Avoid late filing penalties
As well as issuing penalties for incorrect returns, HMRC also issue penalties for late filing. If you wait until the last minute to start preparing for your return, you may realise there is some information that you can not get on time, this could lead to a late submission which then results in late submission penalties. Currently HMRC charge an automatic £100 late submission penalty for any return submitted after the 31st January deadline. If three months pass and the return has still not been submitted, the taxpayer will be charged a further £10 per day for up to 90 days. If the return is six months late, a penalty of the greater of 5% and £300 is charged. The penalty increases if the taxpayer deliberately withholds their return from HMRC. Basically, the longer you delay submitting your return the greater the penalty. Why not prepare early to avoid any penalties!
Get your refund back sooner
If you think you are due a refund for overpaid tax, then getting your return submitted to HMRC early is definitely worthwhile. The sooner your return is filed, the sooner you will receive your repayment. HMRC don’t wait until the 31st January deadline to issue repayments, and as they are much busier close to the submission deadline, you are likely to receive your repayment quickly in the earlier, quieter months!
Get better service from your Accountant
There are many reasons for preparing your tax return early which could benefit you. If you are getting help from an accountant, it also helps them give you a better service as they are not in a rush, doing everything last minute to help you avoid a penalty. This means they have more time to think about the service they are providing you and there is more room for them to give you tax saving advice.
If you need help with preparing a Self-Assessment tax return, please get in touch. Rosslyn Associates are Chartered Tax Advisors with over 30 years’ experience. We can give you peace of mind in the knowledge that your tax return has been completed by a professional and that you will never pay more tax than you should. For more information please get in touch! Email firstname.lastname@example.org or give us a call on 0131 445 1825. One of our friendly team members will be happy to talk things through with you!