Like Christmas, the deadline for self-assessment tax returns comes at the same time every year. Your online self-assessment must be completed by 31st January. If your accountant is completing the return on your behalf, that means getting your books over to them in good time.
Getting organised with your accounts and filing your self-assessment early doesn’t just earn you brownie points with your accountant. It can benefit your business too. Here are our top 5 reasons for filing your self-assessment early.
It helps you with cash flow
When you file your self-assessment return early, it will give you more time to be aware of any tax that’s due. That can help you manage cash flow as you’ll have longer to set aside the funds before the payment deadline rather than finding a lump sum on short notice. It can also mean that you’ll receive any rebates that are due more quickly, which could give you an injection of cash during slower periods.
Time to prepare avoids mistakes
Everyone makes mistakes (even accountants), and they’re more likely to happen when you rush. If you spend time getting back to work after the Christmas break and end up putting your books together in a hurry, you could miss something. The tax-deductible receipt that stayed in a drawer instead of going to your bookkeeper could mean you end up paying more tax than you need to. If you don’t have enough time to discuss queries with your accountant, mistakes can happen, and your return may even end up being late.
You’ll have more time for tax planning
One of the benefits of having an accountant is that we can help you with your tax planning and advise you on any allowances or tax relief you can claim. This is much easier if we can see your accounts and talk to you about your plans in advance. If you arrive at our office with your receipts on 30th January, we might notice that you’ve missed an opportunity to claim tax relief, but there won’t be anything we can do about it.
Avoiding penalties for late filing
Believe it or not, accountants are only human. We will always make the effort to get your self-assessment filed on time, but sometimes there aren’t enough hours in the day. If you send us your books early in the tax year, they’ll take priority, and your tax return will be completed with plenty of time to spare. Wait until a few hours before the deadline, and it’ll likely be late. That could mean you lose money from your business because you must pay a penalty for late filing. These can range from £100 to 100% of your tax bill, which could put a significant dent in your finances.
Be kind to your accountant
There’s a running joke that accountants spend the first week of February in a darkened room, recovering from all the tax returns at the end of January. Joking aside, when you’re kind to your accountant and send us your books early, you save everyone a lot of stress!
If you need assistance with your tax return, please get in touch.
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