It’s common practice for hundreds of thousands of people to file their tax returns at the very last minute each year, yet filing early can save money as well as stress. It’s highly likely you already have all that’s needed to complete your self-assessment return, particularly if you’re self-employed as you will already have received your P60 for the tax year. So, you could say there’s absolutely no reason to delay sending in your tax return.
Around 700,000 people sent in online tax returns on the deadline day in 2019, but this really is cutting it fine. If the HMRC site is running slow, you are risking delaying your return, which could well result in a fine. In fact, over 26,500 people submitted their tax returns in the final hour before the deadline, putting themselves at incredible risk.
Reasons to file your tax return now
You can avoid the January blues by filing your tax return now, and just some of the great reasons for this are discussed below. Using intuitive tax software can help speed up this task.
1. Filing now helps you plan ahead
Getting your tax return done early can help cushion against future financial shocks. The coronavirus pandemic of 2020 has wreaked havoc for many self-employed people and business owners, so submitting your tax return early means you will be more prepared for any similar issues in 2021 and beyond.
2. If you’re due a tax refund it may come quicker
Filing your return early can mean tax refunds are paid out more quickly. As the January tax return season starts to pick up, HMRC is busy checking returns and calculating refunds, so you can avoid all this by filing early.
3. If you are already taxed under the PAYE scheme, you can opt in to pay taxes due
If you’re already earning from another employment, you can pay any self-assessed tax on a monthly basis by PAYE as well. Your tax bill must be less than £3,000 to choose this option and your tax software will advise just how much tax is due. Also, your tax return will need to be online by 30 December each year.
4. Avoid the stress of fines
Filing your tax return early cuts the risk of being fined for a late return. Even if you file one day late, you’ll accrue a fine of £100, and this can soon mount up to the £1,000 cap for the period. Additional fines can also be added if you’re up to six or 12 months late filing your return or paying your tax bill.
There are lots more reasons to file your tax return early, and it certainly helps put your mind at rest and cuts any risks of hitting complications or computer glitches.