Tax season is an inevitable part of every sole trader and company director’s life, and for those in the UK, the self-assessment tax return is an annual obligation that commands our attention.
In this blog post, we want to spotlight the importance of not postponing the completion of your tax return. We’ll explore why you should take the initiative and start your self-assessment tax return now rather than later. Beyond looming deadlines and paperwork, there are compelling reasons why early action is not only prudent, but also advantageous.
So let’s delve into why taking charge of your self-assessment tax return today can pave the way for a brighter financial future.
The deadlines — take note
Deadline for telling HMRC you need to complete a return
You must tell HMRC by 5 October 2023 if you need to complete a tax return for the 2022/23 tax year and have not sent one before.
Deadline for submitting a paper return
If you’re doing a paper tax return, you must submit it by midnight 31 October 2023.
Deadline for submitting an online return
If you’re doing an online tax return, you must submit it by midnight 31 January 2024.
Deadlines for paying tax you owe
You need to pay the tax you owe by midnight 31 January 2024.
There’s usually a second payment deadline of 31 July if you make advance payments towards your bill (known as ‘payments on account’).
You’ll usually pay a penalty if you miss the payment deadline – although you can appeal if you have a reasonable excuse.
Why should you start your self-assessment now?
Avoid stress
Doing your self-assessment return as early as possible gives you the gift of time. Time to gather all the necessary documents, sift through your invoices, and hunt down those elusive expense receipts without the weight of an impending deadline hanging over you.
Working at a steady and unrushed pace can ensure greater accuracy, minimising the risk of errors, unwarranted stress and additional costs.
Avoid penalties
By completing your self-assessment well before the deadline, you significantly decrease the risk of late submission and the ensuing penalties.
Every penny counts, so avoiding unnecessary fines can only be a positive. HMRC aren’t known for their leniency, so don’t tempt fate: file those returns promptly and accurately.
Swift refunds
Completing your tax return earlier rather than later gives you a chance of receiving any owed tax refunds more swiftly. If HMRC owes you, why wait until the last minute to claim? It can be like having a little savings pot that you’ve forgotten about, and there’s no feeling quite like getting an unexpected windfall.
Budgeting
Knowing your tax liabilities well in advance gives you the opportunity to budget effectively. This foresight allows for a smoother cash flow management, helping to ensure you put enough money aside to meet your financial obligations when the payment deadline finally comes around.
This approach can be especially advantageous for self-employed individuals and small business owners for whom cash flow is king.
Peace of mind
There’s something inherently comforting about ticking off tasks well before their due dates, and your tax return is no different.
Finalising your self-assessment early offers the luxury of peace of mind. It allows you to focus on what you do best, whether that’s growing your business, honing your skills, or simply enjoying life, without the thought of tax returns lurking in the back of your mind.
Aid financial planning
When you’re ahead of the game with your tax return, it becomes significantly easier to plan for the future.
Whether it’s making informed financial decisions and investments or simply understanding your financial health better, early completion of your self-assessment tax return can play a vital role in holistic financial planning.
Speak to a professional
In the grand tapestry of life, dealing with your tax returns may seem like a minor inconvenience, but being proactive about self-assessment can make a world of difference.
Our friendly team of experienced accountants is always here to lend a helping hand, guide you through the complexities of the tax system of tax affairs, and ensure your financial journey is as seamless and fruitful as possible.
Get in touch with us to talk about your self-assessment tax return.