If you have just raced to complete your Self Assessment tax return, you are not alone. Last year, HMRC reported that around 700,000 taxpayers left their tax return to the last day in 2020, with 26,500 people submitting their return between 11 pm and midnight - the last hour before the deadline. However, there are many advantages to preparing and submitting your Self Assessment tax return in advance. In this post, we look at some of the benefits of submitting your tax return early.
After you have completed and submitted your Self Assessment tax return, you will know exactly how much tax you are due to pay and when. It is useful to see this figure in advance of the payment falling due as it can allow you to save and plan your finances effectively. You are not required to pay your tax liability when you file your tax return, therefore, filing early, allows you to budget for your tax payment ahead of the payment deadline.
If you are entitled to a repayment of tax, the sooner you file your tax return, the sooner you will receive the repayment due to you.
If you cannot pay your tax bill by the deadline, you can arrange a Time to Pay agreement with HMRC. If you submit your tax return in advance of the deadline, this will give you time to discuss your situation with HMRC.
Rushing to meet the deadline in the final hours is no way to complete such an important task. When you give yourself, or your advisor plenty of time to complete your Self Assessment tax return there is less chance you will make careless mistakes. HMRC imposes fines for careless errors or misleading statements, so it is essential you have enough time to gather everything you need and complete your return meticulously.
You can submit your tax return as soon as you have all of the information available to do so. This will be after the tax year has ended in April. In addition to the tax owed, you may be required to make payments on account. There are exceptions to this, and your advisor will be able to inform you fully of what is due.
As discussed, there are many benefits to submitting your return early, including that you can seek proper advice on wealth management and tax planning. Our experienced tax advisors can help you to manage your tax affairs effectively and take advantage of any wealth management strategies available to you.
Murray Beith Murray remains committed to providing you with our usual service during this unprecedented time. If this blog has raised any questions, or you would like to discuss any other personal tax matter, please complete the contact form or call 0131 225 1200.
Murray Beith Murray was established in 1849, as advisors for generations of clients, committed to our values of integrity, expertise and trust. This aim and these values continue to this day as does our commitment to be here when you need us.