You can start putting your records together for your tax return as soon as the tax year has finished on the 5th April. Even though the deadline for filing your tax return is not until 31st January the following year, it pays to do so early. Here are seven good reasons why.
1. HMRC processes tax refunds early
Once your tax is filed with HMRC, any tax refunds can be repaid immediately (or at least within a few weeks’ time). This means a nice cash injection into your budget that you might not have expected.
2. Tax due date stays the same
Whether you file your accounts late or early, your tax payment will still only be due on 31st January. There are no drawbacks getting your accounts and tax return done early.
3. Filing your tax return early helps manage cash flow
You can reap massive benefits if you already know months in advance how much your tax bill is going to amount to. You will be able to manage your cash flow so that you can save up for a larger tax bill or put a certain amount of money aside each month so that you can easily make the payment when the due date comes around.
4. If you have more time to prepare, you make fewer errors
If you leave it late, chances are you will have to rush putting all your records and receipts together. And chances increase that you’ll make mistakes. You might forget to put in relevant receipts that could potentially lower your tax bill, for instance. Start early, take your time and you can be a lot more certain that you’re getting it all right.
5. Being early means you avoid late penalties
If you leave filing your accounts too late and miss the deadline you will incur a penalty. This penalty increases the later you are up to a maximum of £1500 (if you file more than 6 months late).
6. Your accountant will love you
When using an accountant, be aware that the deadlines apply to us as well. We must file your tax return by the 31st January or you will incur a fine. This means we must have your files (documents, receipts, etc.) in plenty of time for us to be able to prepare your accounts. As many people leave it late, unfortunately, this means January is an incredibly busy time for us.
To make our life as your accountant easier and ensure that we can do the best possible job for you, send us your accounts as early as possibly, ideally shortly after the end of the tax year. At least aim for well before the Christmas holidays, the sooner the better.
7. Enjoy your Christmas
Many people use their Christmas holidays to get their accounting information together. But wouldn’t you rather spend your holidays doing something more fun? You could properly relax with your family and spend time doing what you really enjoy rather than worrying about getting all your tax information together. Get it out of the way well in advance and reap the benefits.
As you can see, there are many good reasons to sort yourself out sooner rather than later. Leaving things to the last minute is never a good idea and it really doesn’t pay when it comes to your taxes.
Get in touch if we can help with any part of your accounts preparation. We’re here for you. You can reach us by either emailing us at admin@alba.uk.com or calling on 01509 853779.
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