Why should you complete your tax return early?
You have the best intentions. You mean to get your documents, numbers and records together but somehow completing that tax return is the one job you just don’t round to. Every year you’re determined that you won’t leave it until the last minute. Then January comes around and as usual you’re scrambling to pull everything together. You’re not alone, in early January 2025, over 5 million people still hadn’t filed their tax return.
However, did you know that getting your tax return competed early doesn’t just give you a warm, slightly smug glow, there are also some real benefits to filing early. In this article, we take a look at some of them.
Know what you owe
There are many benefits to having a clear idea about the size of your tax bill including that it may be smaller than you think. If however, it’s on the higher side of your expectations, you’ll have more time to save for that first payment on account. There is also the possibility that you may be owed money. If you file your return early, you’re likely to receive any rebate faster than if you file in January, when HMRC are at their busiest. Knowing what you owe, can help you plan more easily for the rest of the financial year.
Get it right
Filing at the last minute can lead to mistakes. Perhaps you’ve forgotten to include something or have claimed for relief you’re not entitled to. Filing earlier gives you time to query anything you’re not sure on. Should you, or indeed, the Revenue, correct your tax return, you have extended the time in which HMRC have to open any enquiry into the return should they wish to do so, as this is extended to 12 months from the date of amendment, plus up to the next quarter day. It also leaves you open to interest and late payment penalties should it transpire that further tax is due.
No fines!
If you don’t submit your return or make a payment on time, HMRC will issue a fine. This starts at £100 but will rise after three months and you’ll be charged interest on late payments. In January 2024, over 1 million people missed the deadline and were fined by HMRC. If you file early, you remove the risk of being fined for late submission.
You can prove your income
Once you have submitted your tax return, you will have a much clearer idea of your income. This can be very helpful for those who are applying for loans or mortgages. Equally, if you want to claim benefits, have a student loan or any other form of finance, it can be useful to know exactly how much you have earned.
It’s oh so quiet
January is HMRC’s busiest time and queues to get through to an advisor can be lengthy. If you’re preparing your return earlier in the year, it will be much quicker to get through and the person you’ll be talking to will be under a lot less pressure than during their peak season.
Put your feet up – relax
Imagine that feeling of satisfaction, knowing your return is done. You know how much money you need to save for your first payment on account. In turn, you’ll be able to budget in much better way for the rest of the year. It also won’t hanging over you in the run up to and over Christmas and New Year and January will take on a whole new perspective.
For more information about our services in relation to tax returns please click on this link Personal Taxation – Barrons
You can also find information about the self-assessment tax returns on the Government’s website using this link Self Assessment
