Submitting Tax Returns Early
Every self-employed person, or person with more than one source of income has to submit a tax return by 31st January every year for the tax year that ended on the previous 5th April. There is no getting away from it, and we think there are many advantages of getting your tax return submission out of the way early.
Firstly, the key dates are:
31st July - the deadline to pay your 50% advance instalments for self assessment
5th October - the deadline for new registrations for self assessment
31st October - the deadline for postal self assessment returns
31st January - the deadline to file and pay for online self assessment tax returns
5th April - end of the tax year
6th April - start of the tax year
So, what are the advantages to submitting your tax return early?
For those registered, submitting a tax return is unavoidable, so getting it done early can significantly reduce stress and anxiety associated with the looming deadline and the pressure of gathering and sending off a year’s worth of data. Better still, using a bookkeeper means that the information is already ready.
Accountants, bookkeepers and financial advisors can only deal with a certain number of clients at any one time - and they like taking time off at Christmas too! They are likely to work on tax returns in order of receipt, so sending them over at the last minute is at your own risk.
More time avoiding the last-minute rush allows accounts professionals ample time to work through your affairs, work out your tax liability, draft and review your return for accuracy, address any potential errors or discrepancies, and seek additional advice if needed.
Furthermore, early submission guarantees you steer clear of late filing penalties imposed by HM Revenue & Customs (HMRC), even if unexpected circumstances or unforeseen complications happen.
Know how much to put by
Early calculations mean you know how much you will need to pay and can put that money to one side and raise any queries you may have. You don’t have to pay your tax instalments until the 31st January and 31st July, even if you submit your return early. See it as file-now, pay-later!
Get a rebate earlier
One of the best advantages of submitting tax returns early is that you will get any tax refunds you’re due quicker!
So, in summary, early submission of tax returns provides a valuable opportunity to engage in effective financial planning. By completing the process ahead of time, taxpayers gain a clearer understanding of their financial standing, enabling them to make informed decisions for the year ahead.
By knowing their tax liabilities well in advance, individuals can plan and prepare for any payments that may be due. This proactive approach gives better cash flow management and prevents any nasty last-minute financial surprises.
Early submission also gives you time to work with tax professionals or financial advisors, on potential tax-saving strategies. This collaboration ensures that taxpayers maximise their tax benefits and minimise their liabilities.
By taking a proactive approach to tax obligations, individuals can gain peace of mind, make more informed financial decisions, and optimise their tax positions. That is why we highly recommend that taxpayers file their tax returns early and make the most of the benefits that brings.