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Why you should submit your Self Assessment Tax Return early
18/07/2023

If you submit a Self Assessment Tax Return to HMRC each year, you may not be thinking about filling in all that heavy paperwork just yet. But there are a few benefits to completing and submitting your income details well before the deadline...

Self-Assessment Tax Returns must be completed annually and the deadline for submitting them online is usually 31st January following the end of the tax year (the tax year runs from 6th April to 5th April the following year).

Although many people put off completing their Self Assessment form until nearer the deadline, HMRC has recently reported that the number of people who choose to file their tax return on the first day of the tax year this year (6 April) has more than doubled since 2018. By completing their Self Assessment early, 77000 people have so far avoided the stress of last-minute filing for 2022/23*

Myrtle Lloyd, HMRC’s Director General for Customer Services, said: “Filing your Self Assessment early means you can spend more time building your business or doing the things that you enjoy and less time worrying about completing your tax return. Customers can find out sooner if they are owed money. Once they have submitted their tax return for the 2022 to 2023 tax year, HMRC will let customers know as soon as the return has been processed and arrange for any overpayment to be refunded. Customers who file early also benefit from knowing how much tax they owe and can set up a budget plan to help spread the cost and manage their payments”

Here's why it's a good idea to submit your Self Assessment tax return info early this year:

Understand your liability: Find out what you owe in advance of the payment deadline; take advantage of any tax reliefs and avoid last-minute panic which could lead to penalty charges from HMRC. You can also arrange to set up a payment arrangement, if you need to budget or spread the costs of your liability

Receive repayments faster: If you're due a tax repayment or refund, by submitting your return early, you will receive your repayment quicker – this could be helpful for your cash flow for the remainder of the year

Avoid any nasty surprises: You may need to make payments on account based on your previous year’s income tax liability – by calculating your fees early, you can work out your payments due for next year and plan ahead (you may also be able to reduce your payments on account if your income has reduced from the previous year)

Allow time for tax planning: Preparing your tax return early will help you to consider any tax planning opportunities which could be beneficial to you for the next tax year (our team can advise you on any Tax Planning, which can be tailored to suit your circumstances)

Boost your mortgage application: If you're looking to buy a house or remortgage your property, you're usually asked to prove your income by providing an SA302 and HMRC Tax Year Overview. These documents help to provide mortgage lenders with the information they need to process your application (this is also useful when applying for Universal Credit, student finance, loans or vehicle leasing)

Earlier tax investigation time: An HMRC investigation could be random or targeted but they usually only have 12 months from the submission of your tax return to begin the process. Filing your Self Assessment sooner means that the clock starts ticking earlier

Protect yourself against the unknown: If you choose to file your tax return at the last minute, you may face a serious of issues which have the potential to cause stress and aggravation. If you become ill, misplace important information or experience any kind of disruption which may lead to you missing the payment deadline, you will receive a penalty from HMRC

Benefit from more financial opportunities: If we're able to discuss your Self Assessment with you well before the deadline, we can get a better picture of your financial position and provide any advice or suggestions on how to get the best out of your finances. Starting a conversation early gives everyone plenty of time to discuss any issues and clarify the available solutions

Remember - You may need to do Self Assessment if you:

  • are newly self-employed and have earned over £1,000
  • are a new partner in a business partnership
  • have received any untaxed income
  • are claiming Child Benefit and you or your partner have an income above £50,000

Please do get in touch with us for advice or if you're unsure about whether you need to complete and file a Self Assessment Tax Return for 2022/23.

Please note that the deadline for filing a paper return is 31 October 2023. The deadline to file your completed 2022 to 2023 tax return online and pay any tax you owe is 31 January 2024. 

* Source: https://www.mynewsdesk.com/uk/hm-revenue-customs-hmrc/pressreleases/number-of-self-assessment-customers-who-file-early-doubles-in-5-years-3253032