Why file early?
If you're self-employed, a landlord, earn over £100k or are filing for international matters, you have to file a Self Assessment tax return by 31 January following the tax year that ends on 5 April. It’s all well and good leaving this until the last minute, but there are a few reasons why it’s beneficial to file sooner rather than later.
Avoid unnecessary penalties
We all make mistakes, but filing your tax return later than 31 January will incur some late fees. If you file up to 3 months late, you’ll automatically receive a £100 filing penalty. As time goes on, you may also be charged additional penalties as well as interest. Filing early helps to avoid these issues.
Get issues sorted with HMRC faster
If you need to contact HMRC, the wait times for support become longer the closer to the deadline it gets. It takes time to register for your Self Assessment, especially if you need to be sent a Unique Taxpayer Reference (UTR) in the post so we recommend beating the late-January rush.
Get your refund sooner
If you’re due a tax refund, HMRC will process this quicker the earlier you submit your return. This is simply because it beats the peak around the deadline date.
Even if you’re not due a refund, filing early can help you to be realistic about your spending for the next year. Many people like to set budgets at the start of January, so by getting your tax return out of the way first, you can discover whether you’re due a refund or not and amend your budgets accordingly.
When you file early, you won’t have to pay anything until 31 January.
Avoid extra stress
The last thing anyone needs at the moment is extra stress and worry. With the number of self-employed workers in the UK growing faster than ever, more people are carrying out their first tax returns which can be a time-consuming task.
You’ll need time to record expenses
Finalising your tax return is something many people put off until just before the deadline date. However, working out your expenses takes a lot of time, especially when you’re claiming for your things like annual mileage, phone costs and equipment used.
But by filing early, you’ll have the time to explore all the allowances, reliefs and deductions available to you. It’s crucial to record your expenses accurately as this could save you a lot of money.