The nights are drawing in, the log fires are burning and snow is already upon us. Which can only mean one thing – the 31 January self-assessment tax return deadline is just round the corner.
It’s a tedious job at the best of times, which is why smart people get their accountant to take care of their self-assessment tax returns. Yet, rather than leave filing until the last minute, there are lots of good reasons to beat the self-assessment tax return deadline and submit your return early.
Let’s take a look at them!
1. It gives you extra time to plan for your tax bill
You won’t know how much tax you have to pay until you’ve submitted your tax return. If you file it on the 31 January deadline, you’ll only have until midnight on that day to pay the tax you owe.
On the other hand, if you file your return now, you’ll have a few weeks left before you have to pay. This is going to be particularly important for people who deferred payments due last July because of the coronavirus pandemic – their January bill will be larger as a result.
If you do your tax return now and realise that you’ll have difficulties paying the bill, then it also gives you more time to arrange a ‘Time to Pay’ agreement from HMRC. You can do this as long as you owe less than £30,000 and don’t have other outstanding tax returns (or owe other money to HMRC).
On a more positive note, if you file early, you’ll get any tax refund owing to you early. That has to be a good Christmas present!
2. It may help with your SEISS claims
Many tax experts have been in the media recently, suggesting that an early tax return can help evidence claims for the third SEISS self-employment grant. To qualify for the third grant, which opened at the end of November, you need to have strong reasons to believe that your trading profits will be significantly lower for the period covering November to January.
While the grant doesn’t depend on completing an early tax return, providing evidence of your finances in this way could possibly help your case for receiving support.
3. You can avoid self-assessment tax return mistakes
If you do your tax return early, there’s less chance you’ll make a mistake. If you make errors, you could end up paying more tax than you need. Worse, you could end up paying less and get slapped with a penalty. HMRC will fine you up to 30% of the tax you owe for careless mistakes. These penalties can rise to 100% of tax owed if you deliberately underestimate your tax and try to conceal it – so don’t do that!
4. You can avoid late payment fines
If you keep putting off your tax return, you run the risk of missing the deadline. What happens if you get ill or suddenly have to care for a family member at the end of January? If you don’t file by the correct date, you’ll be fined £100 straight away. Then you’ll pay an extra £10 per day for the first three months you don’t submit. After three months, the fines keep ratcheting up – so don’t risk it!
How to beat January’s self-assessment tax return deadline
If you want to beat the upcoming deadline, then you need to get to work on your tax return as soon as possible. THP’s accountants can help you make the process as painless as possible, plus give you peace of mind that your return is accurate. So whether you want extra time to plan paying your tax bill, want to evidence your SEISS claims or simply want to avoid fines, get in touch today. Our tax return team is ready to help you!
About Jon Pryse-Jones
Since joining THP in 1978, Jon Pryse-Jones has been hands on with every area of the business. Now specialising in strategy, business planning, and marketing, Jon remains at the forefront of the growth and development at THP.
An ideas man, Jon enjoys getting the most out of all situations, “I act as a catalyst for creative people and encourage them to think outside the box,” he says, “and I’m not afraid of being confrontational. It often leads to a better result for THP and its clients.”
Jon’s appreciation for THP extends to his fellow team members and the board. “They really know how to run a successful business,” he says. He’s keen on IT and systems development as critical to success, and he continues to guide THP to be at the cutting edge and effective.