Are you one of those super organised people who file their tax returns just after the end of the tax year or are you in the leave it until I absolutely can’t ignore it camp, submitting your return in the nick of time before the 31 January deadline?
If you fall into the latter category then we suggest you reconsider your approach. Here’s why we recommend you file your tax return early:
1) More time to prepare
You’ll have plenty of time to prepare your tax return and more opportunity to make sure it’s right. Without the time pressure you’ll be less likely to make errors.
2) Manage your cash flow
The earlier you get your tax return in the more time you’ll have to budget and manage your cash flow as you’ll know what your tax liability is going to be.
Just because you get your tax return in before the deadline doesn’t mean you will have to pay your tax any earlier. The January and June deadlines still apply.
3) Get your tax refund early
If you believe you have overpaid tax and are due a refund the quicker you submit your return, the quicker you’ll get your refund. HMRC doesn’t wait until deadline day to pay out refunds and tax refunds are normally processed quicker during HMRC’s quieter period.
4) Pay your tax through your tax code
If you submit your return by 30 December 2015 and owe less than £3,000 you have the option to pay your tax through your tax code.
5) Collect the right amount of tax credits
If you receive tax credit or benefits, your claim needs to be renewed annually by 31st July. Whilst you can submit temporary estimates to the Tax Credit Office, it’s preferable to use actual figures in order to avoid the inconvenience of being over or under paid.
6) Avoid fines
If you file your tax return late, even if there is no tax due, you will be issued with an initial, automatic £100 filing penalty. If you’ve failed to submit after three months you’ll continue to accrue other financial penalties.
Get your tax return in with several months to spare and there is no danger of you having to pay any late filing fines.
7) We will love you!
Your accountant will appreciate not having to burn the midnight oil to make sure your tax return gets in before the 31 January deadline. Preparing early is helpful for both you and your accountant.
If you’d like to get your tax return in early and enjoy the benefits we’ve listed, we’re here to help. Alternatively if it’s now January and you’ve happened upon this blog we can still help to make sure you don’t miss the deadline!
Just give us a call on 01297 639457.