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Your tax return has a love-hate relationship with you every year, forcing you to file late. What if we tell you that submitting your tax return early had compelling advantages? Online returns had a deadline of January 31st. Preparing your tax return over the festive season may be stressful. To make the process go as smoothly as possible, our Tax Accountants are always a click or phone away. A common misconception is that submitting your tax return sooner means you’ll pay your taxes sooner or that HMRC is more likely to look into your tax. However, there are many benefits to filing your tax return early, which will make your Christmas a little less busy.
Some people forget that the tax return filing deadline is also the payment deadline. By filing early, you will know the amount of any balancing payment and any account payment due on January 31st, 2023 for self assessment tax return 2021-22. So you can plan for Christmas and not be short on funds come deadline day. At Tax Accountant, we like to take a proactive approach when it comes to helping our clients with their annual accounts and tax return. We can review your tax position for the year and identify any opportunities for making savings or improving income and profits.
It’s important to submit your return before January 31st. Unless you have a reasonable excuse, submitting beyond this deadline will result in penalties. If you are unable to submit your return on time, you must contact HMRC immediately. They may assess your excuse and suggest the next actions if it is genuine. Notifying them and providing a reasonable excuse for your late submission will result in fines and penalties.
A reasonable excuse may be:
- Your or your partner’s sickness
- Bereavement of a close relative (e.g., parent, sibling)
- A fire or theft destroyed all filing papers
- Problems with HMRC’s online system
- Multiple unsuccessful login attempts due to HMRC’s online system faults
Amount due will be shown on your self-assessment. If you owe less than £3,000.00, you may have the tax collected by adjusting your tax code. As part of the PAYE system, you would pay this back in monthly payments over the following year. This is basically a zero-interest loan from HMRC and may be quite beneficial for managing cash flow after payment of your tax obligation. The only catch is that you’ll need to file your return by December 31st if you decide to go with this method of payment.
Avoid rushing your tax return on the 31st. You may have made errors by not double-checking your calculations before submitting them. Preparing your tax return early provides you with plenty of time to double-check your work. Payment on account for the 2022/23 obligation is required as part of your 31st January payment. This payment may be reduced as needed. It’s best to do this ahead of the hour. Leaving filing till the last minute may also mean missing out on important information like dividend certificates and bank interest figures. Prepare early to allow yourself enough time for any missing data to be requested well in advance.
Sometimes, the best way to reduce your tax burden is to plan ahead. If you want to enable us to help you minimise your tax burden, you’ll need to start early. We can assist with tax planning, as well as preparing tax returns. We can also help with any personal tax liabilities and assist you with meeting your filling obligations. While it’s true that many people simply want their taxes filed for them, there are a lot of ways to restructure your business that can save you money and time. If you’re interested in exploring these options and finding out whether they’re a good fit for your business, then give us a call or send us a message today!