With the new tax year looming, there’s no time like the present to start thinking about your next self-assessment return.
Rather than waiting as your deadline creeps ever closer, why not be proactive?
There are a plethora of reasons we recommend getting ahead of your self-assessment tax return. Here are just a few.
Registration takes time
If you’re starting a new business or didn’t submit a self-assessment for the previous tax year, you’ll have to register by 5 October.
This isn’t as simple as going online and downloading the forms. You need to inform HMRC, get a unique taxpayer reference (UTR) number and finally receive a PIN from HMRC.
The closer you get to the self-assessment season, the longer the process, so don’t hang around.
Stronger tax planning
The sooner you file your self-assessment, the sooner you can start thinking about your payments. By figuring out your liability to HMRC early, you can do some planning on how you’ll afford your bill.
Budgeting will allow you to set aside monthly amounts and control your cashflow. That way, when the time comes to pay your bill, you won’t have to worry about being unable to cover it.
The more time you have, the more thought you can give to your annual allowances and expenses. If eligible, these will allow you to lower your tax bill.
It’s easy to put your tax return off. We get it. But by procrastinating, you’re increasing your chances of missing the deadlines.
The self-assessment deadline for 2022/23 paper returns falls on 31 October 2023, so you’ll have to allow enough time for yours to arrive at HMRC. For online submissions, you have until midnight on 31 January 2024. While that does seem like a long time away, it’ll come around surprisingly quickly.
Missing your deadline, even by three minutes, can result in an automatic £100 penalty. The longer you leave it past the deadline, the higher your penalties will be.
Not only will you incur a fine if you submit your return late, but also if it includes any mistakes. Errors are more likely to happen the closer to the deadline you are, as you may find yourself rushing to get it past the post.
Get a refund earlier
Although this may not apply to everyone, you could get a tax rebate earlier if you find out you’re overpaying your taxes. Filing your self-assessment early will mean you avoid the HMRC crunch time, as they won’t be neck deep in tax returns to sort through.
This could result in getting your refund sooner than usual, so you can use that money to put towards your future payments or save it away for a rainy day.
Reclaim some of your precious time
You’ll already have a finite amount of spare time when you’re running your own business. When you finish a long day at work, the last thing you’ll want to do is sit down and sort through your invoices, receipts and tax returns.
So getting ahead will allow you to reclaim some of your precious time. Also, as the self-assessment season always falls after Christmas, you’ll likely want that extra breathing space to spend time with your family and friends.
Don’t wait a minute longer
Your tax returns aren’t the highlight of your year. We understand that. But getting ahead as early as possible will only serve as a benefit for the upcoming year.
We can help you get a start on your self-assessment and take advantage of the reliefs and allowances available to you.
Get in touch to discuss your self-assessment tax return.