Despite the government’s announcement of the delay to self-assessment tax payments (see our recent summary of the Chancellor’s Winter Recovery Plan), the deadline for your 2019/20 self-assessment tax return has not budged and still looms large on 31 January 2021.


To avoid a fine and to take advantage of the ‘Time to Pay’ facility, it is a requirement that your return is filed on time. It is also critical to factor the new tax timetable of payments into your cash flow planning, and to consider making payments towards any arrears building up, or at least to set up a separate bank account to ear-mark funds for later payment of tax.

We encourage clients to submit their return as early as possible and not leave this irksome task to the New Year but many, many people push it down the list of tasks to complete. In fact, according to HMRC, 3,000 tax returns were filed on Christmas Day and over 9,000 on Boxing Day in 2019, but more than 5 million were still outstanding during January.

Some business owners took advantage of having a little more unwanted time on their hands earlier this year to gather together the paperwork and file their return – these slightly smug people will hopefully be able to enjoy their Christmas break and have more time available to focus on getting their business back on track in 2021. Other benefits of hitting the ‘complete’ button on your tax return are:

 

  1. Owed a refund?
    You may have overpaid on account in 2020 or your tax code might have been wrongly calculated – just two reasons for a possible refund. If you’re due a tax refund, this can be processed more quickly before the January rush when HMRC is over-run with enquiries and admin. Wouldn’t a tax refund be a welcome boost to year-end cash flow?
  2. Think ahead
    Getting your tax return submitted gives you the full picture about what you owe or what HMRC owes you, making future budgeting much easier. Forecasting is exceptionally difficult in the present economic environment. Even if you are able to take advantage of the government’s Winter Recovery Plan and postpone your tax payments, it’s vital that you know when your deferred future payments are due.
  3. Take your time
    As employment and personal circumstances change, it can be time-consuming to gather together the relevant paperwork. Rushing the job can lead to mistakes which could be costly if you are found to be paying an incorrect amount of tax. And nobody wants to have to resubmit their return, or worse still, receive an HMRC investigation.

It’s getting late in the year but it’s not too late to benefit from submitting your tax return NOW. If you need help, CRM has extensive experience of all digital tax software and can advise you on the most efficient way to get the job done. Call the experts on 01865 379272.

Sage Accountant Partner Logoiris kashflowFreeagent