Wimbledon, the most coveted tennis Grand Slam, is just around the corner so why not take this opportunity to hit an early winning (tax) return and say ‘game, set & match’ to HMRC!
As well as eating strawberries & cream, BBQing and sipping Pimm’s, the slightly quieter summer period is the perfect time to get your tax paperwork sorted out and your Self Assessment tax return filed. With the online deadline of 31st January 2020 (paper deadline 31st October 2019), it’s very tempting to wait until a few weeks or even days before. Here are seven benefits to getting it all done and dusted now:
Time to register
Many people don’t know that the earliest you can file your tax return is 6th April, as soon as the tax year ends. If you haven’t filed a return before, you’ll need some time to register with HMRC and get set up so don’t sweat over it in January – do it now.
The great receipt hunt
It’s inevitable that over the course of the year, your receipts and invoices become misplaced so start the search now – car door pockets, handbags, wallets and office drawers may all offer up important little scraps of paper. Gather them together with plenty of time to sort them. Of course, many businesses are using online tax tools which can make the process even easier – CRM has lots of experience in this area and can advise you on the best course of action.
File now, pay later
Just because you file your tax return early, doesn’t mean you have to pay your tax bill any earlier. The deadline for paying up is still 31st January for the balance and first payment on account and 31st July for the second payment on account, no matter how early you file.
If you’re due a tax refund, the quicker you submit your return, the quicker the refund will be processed and can be earning interest in your bank account. Refunds often take longer to process in the much busier January period.
Plan for tax owed
When your tax return is complete you’re fully in the picture about what you owe HMRC so the earlier you file your return, the longer you have to budget for what’s due in January with no last minute nasty surprises. If your liability is lower than last year, for example, because your income is lower, or you have extra deductions, then you may be able to reduce your July payment on account rather than overpaying and then getting a refund later.
Change of circumstances
If your work or home situation has changed during the tax year – divorce, employment, inheritance, etc. – gathering the necessary paperwork together and talking through the tax implications with the accountants at CRM this summer gives you breathing space to get it right.
Avoid those nasty fines
Late tax returns incur an automatic penalty of £100, no matter how much tax you owe. If your tax return is over three month’s late, £10 daily penalties accumulate up to a maximum of £900. For a six month overdue return, the penalties grow further and can reach £1600 so it’s well worth not burying your head in the sand and getting to grips with your tax return as early as possible.
If you feel that you could use some help preparing your 2018/19 tax return in a calm, error-free way, contact the tax experts at CRM on 01865 379272.