Self-Assessment – Why you should file early

by | Jun 24, 2020 | Personal Tax, Self-Assessment Tax

It is of course so easy to put off your self-assessment tax return until later, perhaps even the last minute. However there are significant benefits to getting it done early and ensuring your tax affairs are up to date.

Find out your liability
By filing your tax return earlier, you will have the benefit of knowing your liability earlier. This will allow you to claim your allowable tax reliefs as soon as possible as well as giving yourself more time to budget for payment of tax owed. It may even be possible for tax owed (up to £3,000) to be collected through your salary or pension.

You will also avoid the risk of HMRC interest and penalties if you miss the final deadline.

Receive an earlier repayment if one is due
If you are fortunate enough to be due a repayment, then why not benefit from having it in your account earlier. It could be particularly useful for your cashflow, particularly in today’s economic climate.

COVID-19 July payment deferral
You are usually required to make payments on account based on your previous year’s income tax liability.  This year however, the government’s COVID-19 support measures allows automatic deferral of the 31 July payment, until 31 January 2021. Although the July payment will be automatically deferred, calculating your tax liability early will provide you with more accurate details and knowledge of your upcoming tax liabilities into the 2021 year (so that it doesn’t come as an unexpected ‘surprise’ next year).

Stress free Christmas
Save yourself the stress of filing your return at the end of the year. Most of us would rather put off completing their tax return but you might just be glad of one less worry when the Christmas rush approaches.

The unknown
If 2020 and COVID-19 has demonstrated one thing, it is the power of the unknown. If you wait until the last minute to file your self assessment tax return, unknown factors such as illness, mislaid information or disruptive weather could add additional stress. Dealing with your tax affairs ahead of time avoids the headache of missed deadlines and HMRC interest and penalties.

Find out how Kingston Burrowes can help with your self-assessment tax return today.

Other posts you might like:

Mini Budget 2022 – Key Points

Mini Budget 2022 – Key Points

On Friday 23 September, the Chancellor Kwasi Kwarteng announced the Government’s mini budget. We have provided a round-up of all the key points, from both a business and personal tax perspective. Personal Tax Income Tax There will be a cut in basic rate of income tax...

read more
The Construction Industry Scheme (CIS)

The Construction Industry Scheme (CIS)

What is the Construction Industry Scheme (CIS) and how does it operate? In the following guide, we will explore how the HMRC scheme works for freelance subcontractors in the UK construction industry. The scheme was set up by HMRC to collect income tax from those...

read more
Taking Advantage of Marriage Tax Allowance

Taking Advantage of Marriage Tax Allowance

Marriage Allowance is one of the most under-utilised personal tax saving options and at a time when cost of living pressures are only increasing, it’s worth taking advantage if you can. One of the reasons for such a low take up of the scheme is probably because the...

read more