Well, 2020 hasn’t exactly been the year we all expected has it? I’m not sure the words coronavirus, furloughing or social distancing had passed my lips before this year, and now they’re all we seem to be talking about. And it may well seem with everything going on that the 19/20 tax year is a distant memory. However, if you haven’t submitted your 19/20 self assessment return yet, then you can’t say goodbye to19/20 just yet. Whilst the deadline for the return isn’t until 31st January 2021, there are many reasons why getting it submitted early will benefit you.
Avoiding a penalty
If your return is fi led late, you will instantly receive a £100 penalty (this increases the later the return becomes) and if your payment is late, you will also be charged interest on the amount due.
Avoid the stress
It’s true, no one enjoys preparing self assessment returns, and the dread of having to complete it may be worse if you are worried about the amount of work involved, or expecting a large tax bill. But truly, there is no point trying to bury your head in the sand about it- the more you put it off, the worse the dread becomes(a dread that may well be unfounded). By completing your tax return early, you will have the heads up well in advance of the payment deadline as to how much you are going to owe, therefore giving you time to get that money set aside (if you haven’t already). Leaving fi ling until the last minute won’t change the amount that you owe, but will just leave you with less time to prepare for the payment.
Many people worry that any tax due will be payable as soon as the return is fi led, meaning that they put off submitting their return until they can pay the tax. This is not the case. Submitting your return early will not bring the payment deadline forward. Whether you submit your return the day after the tax year ends, or the day before the deadline, your tax will still be due on the same date, 31st January 2021. So, don’t let this put you off fi ling your return early.
Avoid refund delays
If you are lucky enough to be due a refund from HMRC, you’d be crazy not to get your return fi led early! By getting it fi led well before the deadline, you are getting your refund request submitted before HMRC are overrun with tax returns around deadline day. We know first hand that HMRC are much quicker at processing refunds in the quieter months in the lead up to deadline day.
Avoid making mistakes
If you leave the return to the last minute, you are much more likely to make errors in your haste, and, if you have an accountant, you will not be leaving adequate time for them to raise any queries with the details you submit. If you are fi ling your return yourself and you haven’t fi led before, you need to have an HMRC Government Gateway login to do it online, and HMRC can take 7 working days to send this out, so do bear this in mind as well. HMRC can charge penalties of up to 30% for careless mistakes on self assessment returns, it is so important to take your time to prepare your return properly.
And a fi nal one, that has become apparent in 2020- avoid being left out
If you are self employed, then your self assessment return is how you declare all of your business income to HMRC. What became apparent with the self employment income support scheme introduced as part of the government’s Covid-19 action plan, is that the self employed would be getting relief based on the details completed in their 18/19 personal tax return. No one could ever have predicted the twists and turns this year would take, but this has proved that there is another benefit to ensuring you get your self assessment return in on time.
PaperRocket Accounting provide accounting and tax services to professional contractors, freelancers, and small businesses working in the UK.
We offer our clients a flexible choice of fixed fee monthly packages which cover all of their accounting and tax needs (so no hidden costs or surprise bills!). All of our accounting packages include a monthly subscription for a cloud accounting software subscription provided by the awarding winning FreeAgent.
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