Just like revising for an exam, or trying to find your passport before going on holiday, doing your tax return at the last minute is never a good idea. You might get lucky, but there’s a risk something will go wrong.
Getting it done early on the other hand, not only minimises the risks, but also comes with a number of benefits. The deadline for filing your online tax return and paying your tax bill is 31 January, but we would advise acting well before that.
Here are five reasons why.
1: Optimise your tax return
Gathering the paperwork early gives you and your advisers the time to explore all the tax allowances that may be open to you.
There’s also time to ask questions, go backwards and forwards if required, and make sure you use every tax break available to you within the rules.
2: Reduce the chance of error
When you’re in a rush it’s easier to miss something, or not be able to find a key document, which could lead to an incorrect return or missing the deadline altogether.
A late filing results in an automatic minimum penalty of £100 on top of any tax due (and interest). In a worst-case scenario, you may trigger an enquiry which can be stressful and costly.
3: Time to pay
As well as the deadline for filing your online tax return, 31 January is also the date by which you must pay your tax bill.
You may have the amount covered come what may, but if your tax liability is unexpectedly large, the sooner you know about it, the sooner you can make arrangements to pay it.
4: Dodge the curve balls
Thanks to the coronavirus pandemic, the upcoming January deadline for 2020/21 may be an unusual one for you tax-wise.
First, your income may be radically different (for good or bad) due to the disruption caused by COVID-19.
In addition, a number of the support measures provided by the government may need to be declared on your tax return.
Giving yourself time to consider all this may help you dodge a coronavirus curveball that will wrongfoot some people for sure.
5: Peace of mind
It may be a nuisance to sit down and do the admin relating to your tax return, but the longer you put it off, the longer you have it hanging over your head.
With the festive season around the corner, make sure you have the headspace to enjoy it by ticking your tax return off your to-do list beforehand.
We can take on much of the legwork out of your tax return if you would like us to assist you – from doing your calculations to filing it online.
The quicker you start the process, the more opportunity we’ll have to advise you and ensure you are using all your available allowances.
Get in touch with us today.