However, by being a tax return early bird it will not only mean that you avoid spending the festive period immersed in tax. There are several other advantages to filing early and here, we take a look at these.
1. Allows sufficient preparation time
If you’ve never completed a self-assessment in any form, the first thing you need is a ten-digit Unique Taxpayer Reference (UTR) code. If you are completing the tax return yourself you will also need to set up your Government Online Gateway account (for clients we will take care of this). Your UTR can take some time to be sent to you (HMRC recommend that you give yourself at least 20 working days to receive your number), so starting early means that you give yourself time.
Also if you are providing your paperwork to us to complete your return, we’ll have time to set ourselves up with HMRC as your authorised agents and if there is any further information we need, you will have time to retrieve and send this to us.
2. Eases your cash flow
Filing your self-assessment sooner will give you more notice on the tax that will be due, so you can make plans to ease your cash flow by making provisions over the next few months.
3. Allows tax planning consideration
There are a wide range of reliefs and/or exemptions available, but if you leave your self-assessment to the last minute it doesn’t give you time to review these, and/or discuss their suitability with your tax advisor. You can see some of these tax planning opportunities in our latest Tax Tips Guide.
4. Speeds up tax refunds (but not tax bills)
The good news about filing early is that you may be able to access tax refunds sooner without the worry of tax payments coming any sooner. The tax payment dates will remain the same regardless of when you file. Therefore, again this potentially creates more cash flow advantages.
5. Helps avoid mistakes
Mistakes and errors in your tax return can attract penalty fines as well as attention from the taxman, and a tax investigation can be a drawn out and stressful process if you are targeted. Giving yourself plenty of time means that you will not need to rush, can pull together all your receipts and can contact a professional for advice if you have any queries.
6. Avoids late filing fines
Leaving your filing until the eleventh hour puts you at a greater risk of missing the deadline entirely. Penalty fines for late filing can range from £100 to 100% of your tax bill (effectively meaning you pay your tax twice over), so it really is worth making sure you allow sufficient preparation time.
How we can help
We will be reminding clients shortly to send their information to us as early as possible so that we can begin on their assignments.
If you are looking for a tax advisor to complete your tax return this year, please contact our team for a no obligation quotation. We are on hand and ready to get started on your tax filing.