Why should I file my tax return early?
1. You’ll have more time to plan
For some people, it’s only once they’ve filled out their tax return that they’ll know the final amount of tax they need to pay. If you file early, you’ll have several months to make plans to pay off the bill, which doesn’t need to be done until 31 January 2023.
2. You can seek help if needed
Self-assessment isn’t always straightforward, and you may have important questions you need HMRC to help you with.
3. You’re less likely to make a mistake
Giving yourself more time means you’re less likely to have to rush your tax return, which can lead to careless mistakes. HMRC can impose fines for mistakes.
The penalties are based on the amount of tax you owe, and depend on the kind of mistake HMRC deems you to have made:
· 0% charge: you’ve taken ‘reasonable care’ to fill out your tax return correctly
· 0%-30% charge: you’ve been careless and made mistakes
· 20%-70% charge: you’ve deliberately underestimated your tax
· 30%-100% charge: you’ve deliberately underestimated your tax and tried to conceal it.
4. You can avoid costly late fines
HMRC imposes fines for tardiness. You’ll usually have to pay £100 if your tax return is even a day past the deadline (31 January). It’s then £10 for each additional day (capped at 90 days), plus the £100 initial fine – coming to a total of £1,000.
5. Don’t miss out on changes to work from home rules
If you’re overly stressed about meeting the filing deadline, you could end up missing the opportunity to claim important tax breaks. For example, if you had to work from home during the pandemic, you may be able to claim tax relief worth up to £125 a year.
Are you looking for a reliable accountant?
Our team of experts are on hand to advise and support you with any accountancy needs, including filing tax returns and taking over your business’ finances. We offer a free consultation to start the process, discussing your needs and business requirements. We mainly provide our services across the North West, including: Accrington, Bamber Bridge, Buckshaw Village, Blackburn, Burnley, Clitheroe, Chorley, Colne, Darwen, Hurst Green, Lancaster, Longridge, Lostock Hall, Penwortham, Preston and the surrounding areas, as well as nationally.
