Key benefits of filing Self Assessment Tax Returns early

Many people put off completing their self-assessment tax return until closer to the deadline. There are many practical reasons why completing your tax return earlier may benefit you and why now is an ideal time to ensure that your tax affairs are up to date:

1. Know your liability

File your tax return now, and;

• Be aware of your tax liability earlier
• Claim all allowable tax reliefs as early as possible
• Avoid last minute panics and the potential for HMRC interest and penalties
• It may be possible for tax owed of up to £3,000 to be collected through your salary or pension

Give yourself longer to budget for payment or set up a payment arrangement with HMRC if required. (Filing your return early does not mean paying your tax earlier.)

2. Get your repayment in your account

If you are due a tax repayment, then submitting your return early will result in you receiving the repayment quicker, which could prove to be particularly useful for cash flow over the summer months.

3. The July payment on account

You may be required to make payments on account based on your previous year’s income tax liability. Calculating your tax liability early will provide you with more accurate details and knowledge of your upcoming tax liabilities (so that it doesn't come as an unexpected 'surprise' next year). You may also have an opportunity to reduce your payments on account if your income has reduced from the previous year.

4. More time for tax planning

Preparing your return early allows time to consider any tax planning opportunities with plenty of time to implement them in time for the following tax year.

5. It could help you get a mortgage

If you are planning to buy a house or re-mortgage your existing property you are typically required to prove your income by providing an SA302 and HMRC Tax Year Overview. These documents will show how much income you have declared to HMRC and provide lenders with the information they need to progress your application.

This will also apply to other forms of finance or benefits, for example:

• Universal Credit
• Student Finance
• Loans or vehicle leasing

6. One job done

Many people do not like completing their tax return and may put it to one side.

HMRC have 12 months from the date they receive your completed tax return to open an enquiry, filing sooner means the clock starts ticking earlier. Tax investigations can be random or targeted, you can protect yourself by subscribing to our Tax Investigation Service.

7. Don’t get caught out by the unknown

If you do not file your tax return information until the last minute, unknown factors such as illness, mislaid information or disruptive weather could add additional stress. Being organised in dealing with your tax affairs avoids the further headache of missed deadlines and HMRC interest and penalties.

Shorts' tax team file over 1,500 self-assessment returns every year and would be happy to discuss how the team can help you with your submission.

Source: https://blog.shorts.uk.com/benefits-file-self-assessment-tax-return-early