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Benefits of Filing Your Self-Assessment Tax Returns Early

September 12, 2023

Self-assessment tax returns must be filed annually by anyone who is self-employed, a company director, or receives income from renting out a property or other sources not covered by PAYE, as well as those who receive income from abroad. The deadline for submitting tax returns is usually 31st January following the end of the tax year, which runs from 6th April to 5th April the following year. However, there are many benefits to filing your tax returns early.

Improved comprehension of your tax obligations

Filing your tax return early will help you stay on top of your tax liabilities, allowing you to take advantage of all allowable tax reliefs and avoid last-minute panic, as well as potential interest and penalties from HMRC. If you owe up to £3,000 in taxes, it may be possible to have it collected through your salary or pension, giving you more time to budget for payment. Filing your return early can help you avoid unnecessary stress and stay in good standing with HMRC, although it does not necessarily mean paying your tax earlier.

Quicker repayments

Submitting your tax return early will result in you receiving any tax repayments quicker, which could be useful for cash flow over the summer months.

No bad surprises down the line

Calculating your tax liability early will provide you with more accurate details and knowledge of your upcoming tax liabilities. This will help you avoid unwelcome surprises next year, such as having to make payments on account based on your previous year’s income tax liability. You may also have an opportunity to reduce your payments on account if your income has reduced from the previous year.

Additional time to engage in tax planning

Filing your tax return early allows time to consider any tax planning opportunities with plenty of time to implement them in time for the following tax year.

Positively impact your mortgage or remortgage application

If you are planning to buy a house or remortgage your existing property, you will need to prove your income by providing an SA302 and HMRC Tax Year Overview. Submitting your tax return early will provide lenders with the information they need to progress your application. This will also apply to other forms of finance or benefits, such as Universal Credit, Student Finance, loans, or vehicle leasing.

Only 12 months to open an investigation

HMRC usually have 12 months from the date they receive your completed tax return to open an investigation. Filing your Self-Assessment sooner means the clock starts ticking earlier. Subscribing to a Tax Investigation Service can help protect you from random or targeted investigations.

Stay protected

Filing your tax return early helps you avoid the further headache of missed deadlines and HMRC interest and penalties, which can be caused by unknown factors such as illness, mislaid information, or disruptive weather.

Access more

Filing your tax return early allows for wider discussions about your general financial position, not just tax, and can explore various additional opportunities you may have. Starting these conversations early means there is more time to assess any issues and put any necessary remedies in place, without running out of time.

In conclusion, there are many practical reasons why filing your self-sssessment tax return early may benefit you. If you would like to discuss this further, get in touch with one of our Hentons team.

Gary Olding

Gary is the National Head of Tax and overseas our Tax Compliance and Medical Tax Teams. When not dealing with clients he is supervising operations, troubleshooting, and optimising workflows.

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