Advantages of filing taxes early
Advantages of getting your taxes done early.
It can be tempting to wait until the January deadline to file your tax return. But in reality, you can file your self-assessment return on 6th April 2019 if you want. I always recommend getting your tax return in as early as possible and I have outlined several reasons why this can really benefit you.
· Expect the unexpected – The worst thig that can happen to you is that you sit down to do your tax return on 31st January and the tax bill that comes back is way bigger than expected. This happens quite often to the unprepared, tax rates and bands are always changing so even if your circumstances are similar to last year, the tax to pay will always change.
Especially if you are unfamiliar with tax law you can get caught out here. Unknown changes to the tax system or even an unexpected move into making payments on account can catch the unprepared out. If you get your taxes done early it will allow you time to query your tax bill, get help to make sure it is correct and ultimately be able to pay it on time if required.
· Get a refund quicker – If you are due a tax refund you can normally get this paid to you within a couple of weeks of submitting your tax return. Why would you want HMRC to hang onto this for you? Wouldn’t you rather spend this yourself or invest it in your business?
· Prepare for your tax bill – Getting your tax return in early gives you the exact amount you need to pay over in January. This allows you to budget what you need to put aside each month.
· Keep HMRC on side – In my experience HMRC are much more open to helping with problems or errors on your tax return, if you submit it in good time. If you are submitting it late or run the risk of submitting it late you will already be in the bad books. If you are going to struggle to pay your tax bill then payment plans are much easier to get in place if you have filed your tax return in good time.
· Avoid the busy times – Remember parts of the tax system still operate in the dark ages. HMRC will only send out really sensitive information such as UTR numbers and activation codes via post. It can take a month to get a unique tax reference number posted to you! If you leave it to the last minute you run the risk of not getting everything in place. Furthermore, HMRC are even busier in January and wait times can take longer, this is especially true if you need to call HMRC. During peak times you can expect to spend long periods on hold or for it to be too busy to even be put on hold. Why not plan to do this at a quieter time.
So what are you waiting for? Find some time and get started on your 2019 tax return. This may not always be applicable and there may be some good tax planning reasons to wait and hold off on filing your tax return, but generally speaking there is no time like the present!