When we advise you to spend your valuable time on filing your tax return as soon as possible, even though we’re still months away from the deadline, it’s perfectly reasonable to wonder why. After all, you’re busy enough with paying work, without adding to your to-do list unnecessarily. Why are we asking you to prioritise this task over so many others?
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However, we know from experience that submitting your return early means you'll have an easier time and it really is in your best interests to get it done now. Here are the some of the most important reasons why.
You’ll know how much tax you owe
It’s always better to know what’s going to happen, rather than guessing. The earlier you know how much tax you have to pay, the easier it will be to plan for it. Filing your tax return now removes any uncertainty; you’ll know exactly how much you owe and you’ll have much more time to budget. If you’re quick, we might even be able to change your July payment on account.
Your tax planning strategy will be more effective
Given time to dedicate to it, your accountant can help you implement an effective tax planning strategy that will minimise your tax and save you money. This may not be possible if you barely squeeze your tax return in before the deadline.
Preparing your return right up against the deadline severely limits your opportunity to take any tax-saving action, meaning you could end up paying more tax than you need to.
You’ll get your refund sooner
We’d all prefer our money to be in our account rather than the tax man’s. The earlier you file your return, the sooner any repayment you’re owed will reach you. Why let HMRC hold on to your cash?
Avoid the panic
Most tasks are easier if you give yourself plenty of time. If you can’t find the details you need, or you can’t remember where you filed important documents, passwords or login information, you have time to track them down. If you have questions for your accountant, you have time to ask them. If your internet connection goes down, you can come back when the issue is resolved.
The closer you are to the deadline, the more stressful these things become. Filing your tax return now removes unnecessary stress from your life, and who doesn’t want that?
It will remove the risk of a penalty for filing your tax return late
Who knows what might happen between now and the filing deadline? What will life look like in December? What challenges will you be facing?
Between then and now, there are almost infinite opportunities for life to surprise you, distract you, or for your situation to change. If the last few years have taught us anything, it’s that any plan can be derailed by unexpected events.
Until you’ve completed your tax return, there is a risk that you won’t manage to do so in time, and late filing will earn you a penalty of at least £100. Besides, wherever you are as this year draws to a close, you won’t be sorry that you’ve already completed your tax return.
It’s one less outstanding task
December is the month of the spiralling to-do list, and the last thing you’ll want is another urgent task to complete. This is even more true for contractors, who usually have many competing demands on their time. Why not give your future self an early Christmas present, and tick the task off now?
If you have any questions or if we can help in any way, please contact our expert team on 01296 468483 or email info@orangegenie.com