42% of tax payers file their return in January....
Don't be the 42%
It’s tempting to wait until the January 31 deadline to file your self-assessment tax return, but there are some good reasons to get started early:
1. Avoid an upfront bill by spreading your payments
Taxpayers with small tax bills can secure a cash flow advantage by filing early.
However, the option is only available to those in PAYE employment who earned additional income during the year on which they owe tax.
If the tax owed is less than £3000 you can request HMRC to calculate whether the underpaid tax can be taken from your salary or pension in equal instalments over the 2022-23 tax year.
2. Registering with HMRC can get ‘taxing’
If this is your first year filing a return, you will need to register with HMRC for online services. Jaccountancy can do this for you however the process can get ‘taxing’ as it takes almost 4 weeks for HMRC to generate a UTR code once you register.
If you are start now you can get everything sorted but if you wait until the January rush … it might take longer.
3. HMRC is not ‘easy’ to get hold of, even more so in January
If you called HMRC’s telephone service ‘worse than abysmal’ you’ll most likely be told that you are putting it mildly. A survey carried out found that taxpayers had to wait an average 52 minutes for an answer. Imagine the situation in January when millions of taxpayers are trying to get through. Filing now will help you avoid the rush.
4. Get more time to organise the information you need to file
Well if you leave it to the last minute, you are more likely that you will make mistakes in the rush to file before the deadline. Instead of rushing around at the last moment looking for receipts, bank statements, P45s, invoices and expenses, reliefs, allowances, balance sheets, dividend vouchers, you can take the time now to get all your information together.
5. You won’t overspend on Christmas
Christmas is the most wonderful – and expensive – time of the year and it’s easy to spend more than you have. It’s much better to find out what your tax bill is so you can budget to pay and know what you have left over to play with.
Things to think about :
Avoid HMRC’s infamous £100.00 penalty
If you want people to do what you want, fines can be an incredibly useful tool. At least that’s what HMRC thinks. Filing early will help you avoid HMRC’s progressive late-filing penalty system:
Penalties for sending your tax return late
If you do not send us your tax return on time, you’ll have to pay a penalty
If you delay sending in your tax return by:
• 1 day – you’ll have to pay a penalty of £100
• 3 months – you may have to pay a penalty of £10 a day, for a maximum of 90 days (£900)
• 6 months – you’ll have to pay a further penalty of 5% of the tax you owe or £300, whichever is greater
• 12 months – you’ll have to pay a further penalty of 5% of the tax you owe or £300, whichever is greater – in some cases, you may have to pay up to 100% of the tax you owe
These penalties are in addition to any penalties for paying your tax late.
Penalties are not the best way to spend your hard-earned cash. We think it’s better to pour yourself a cup of coffee and get in touch with Jaccountancy .
Get professional advice at reasonable rates
What is the one similarity between advisers and airlines? **They both get expensive during peak seasons**
Enrolling a professional firm to file on your behalf gets expensive as you move closer to the deadline mostly because those existing clients get priority during tax season.