Do you intend to postpone submitting your tax return? Is that anything you’d rather be concerned about in the coming year? January 31 is a long way off! Getting your tax return filed on time might have several advantages. We look at five reasons why we think preparing and submitting your tax return early is good.
1. You don’t have to pay your taxes until the deadline:
You’re excused if you put off filing your tax return until the last minute because you assumed you’d have to pay your tax bill as soon as your self-assessment was filed. It’s a frequent misunderstanding that’s likely kept hundreds of small company owners from reporting their self-assessments with HMRC on time. Remember that you may need to keep an eye out for payments on account, which we’ll discuss later.
2. Avoid penalty:
Tax returns are normally due by January 31 each year. Unless you have a legitimate justification, submitting beyond this deadline will result in penalties that cannot be avoided. Although no one intends to wait until the last minute to file their taxes, anything beyond your control in January might result in a late return.
3. Prevent last-minute panic:
Putting off your tax return submission until the last minute might lead to undue stress as you try to locate and email all of your tax return information to your accountant. According to HMRC, the busiest hour for submitting returns in 2020 was between 4-5 pm on deadline day, with 26,562 people filing at the eleventh hour up to midnight on January 31.
If you leave it too late, HMRC helplines get busy coming up to the deadline, so you may face irritation and delays if you have any difficulties or inquiries.
4. Make the most of tax-saving options:
You will have more time to take advantage of tax planning alternatives for the following year if you calculate your tax status early. This might involve the following:
- To obtain your entire personal allowance, make gift assistance or pension payments.
- Transferring assets to a spouse with a lesser income
- Changing the ownership of shares or income from a partnership
5. You’ve got nine months to save for your tax bill:
One of the most compelling reasons to file your self-assessment as soon as possible is that you will have more time to save for that dreaded tax payment. We recommend setting aside a particular amount of money each month so that if you need to file your tax return at the last minute, you have the cash available.
However, this does not always work out, and many business owners are left scrimping and saving at the last minute, resulting in a great deal of unnecessary stress – anguish that can be avoided.
Self-Assessment is the dirty laundry of the corporate world; you know it needs to be done by the end of January each year, but you keep putting it off, thinking it will disappear. Christmas has suddenly arrived, and you realise you can no longer ignore it. For help, contact McCarthy Browne!