Okay, we all know we should just get on with our tax returns rather than leaving them until the end of January.
However, most of us do leave it until the last minute. Perhaps it's not the most interesting thing on the to-do list.
Apart from feeling smug, what are the benefits of getting the tax return done sooner rather than later?
Here are 5 reasons to submit your Tax Return early:
1) Penalties for Filing a Tax Return Late
- If you miss the 31st January deadline you get a charge of £100
- If it is over 3 months late things start getting expensive - £10 per day
So, if you intend to get your return done by the end of January - why should this mean doing it sooner?
Because things happen! Some of which might be more pressing come January...
What if you have a reason for your late tax submission?
Every year there are lists of the strange and bizarre reasons people give HMRC for their late submissions.
There is no getting away from the fact that you could make a new human from scratch, let alone fill in a form, in the time given. So, having a cough on the 31st isn't going to cut it I'm afraid.
2) Submitting your Tax Return early can help you manage your cash
Submitting your tax return earlier does not mean you need to pay your tax return any earlier.
Knowing how much you owe in tax can help you manage your cash. Discovering how much you owe at the last minute is never nice. Especially if you've just found you're going to have to start making Payments on Account - where you'll effectively have to pay another 50% in tax to cover the next tax year.
An early submission can really work in your favour if you've paid too much tax and are due a rebate. Normally if you're on the CIS scheme or left employment to start your own business.
Why wait 9 months to get hold of the cash? The sooner you get the return in, the sooner your rebate will be paid.
3) Gives you time to get assistance with your Tax Return
You might find you need some help getting your tax return completed. The more time you have to play with, the better for getting issues resolved.
If you decide you need an accountant to help, better to be able to choose someone who's a good fit for your business rather than whoever is available at the last minute. This can also affect price, as a simple job that needs to be done at 2am to hit a deadline is likely to come at a premium.
4) Having all the paperwork for your Tax Return
Paperwork has a habit of getting buried. You're likely to have everything you need for your tax returns to hand in May. So, far easier to do your tax return or pass on to your accountant then, rather than hunting around for it when the deadline is looming.
5) Getting some benefit from your Tax Return
Some businesses only produce accounts for their tax returns. If this is you it can be a good opportunity to get an overview of how your business is doing year on year. Your accountant might also have ideas on how you could improve the way you use and record your transactions.
This can be helpful if you're in a position to make changes. Not so helpful if you're almost through the next year.
Your tax return is something you need to get done. So far better to get it out the way, otherwise it's likely to just prey on your mind.
I hope the above gives you some incentive to start this dealt with sooner rather than later. Whether you decide to do it yourself or engage an accountant.
Let me know in the comments if you can think of any other reasons to get it done earlier or if there are any reasons to put it off!