Nobody likes to do tax returns but there are actually some pretty good reasons to do your tax return before the deadline and get it out of the way.
- Avoid Last-Minute Stress: Getting it done well before the deadline reduces the pressure and stress associated with the tax deadline. You have more time to gather necessary documents and ensure accuracy in a much more controlled and stress free way.
- Faster Refunds / Smaller Payments: A lot of people actually get refunds on submitting a tax return. Even if you don’t you might still see a reduction in the payments on account due. The sooner you submit your tax return the sooner you will get the refund you are due! The sooner you get the refund the sooner you can use it! Even if there is no refund a lot of people like to get the return done before the end of July to see if the 31stJuly payment on account can be reduced. Why pay more than you have to?
- Time for Corrections: Getting the return done early gives you time to correct any errors or address any discrepancies in your return without the rush of the deadline. If those errors result in an increase in tax due it is much better to have time to identify and correct them well before the payment date.
- Avoid Penalties and Interest: This one is hopefully self-explanatory. Get the return in before the deadline and avoid penalties!
- More time to plan: Once you complete and submit your return you will find out the amount of tax you have to pay. If you only prepare the return on the tax due date you would have any time to save/plan for the payment. If you get the return done in April/May you will have over half a year to plan for the payment!
- Better Financial Planning: Early preparation helps you understand your tax situation sooner, allowing for better financial planning for the rest of the year. If you spot something in late January there are only three months of the tax year left but if you spot in April/May you still have ten months left to put things right going forward potentially savings thousands!
- Protect Against Identity Theft: Believe it or not filing early reduces the risk of tax-related identity theft since thieves won’t have a chance to file a fraudulent return before you do.
- Eligibility for Financial Aid: Some means tested benefits require your income details. Equally some student grants and awards do. The sooner you have your figures prepared the less chance there is of blocking other things!
- Professional Assistance Availability: Our tax team will not only be more likely to be able to help earlier in the tax window but they will definitely love you more! Leaving things until the last minute means all involved are rushed, which only increases the chances of errors.
- Lower Taxes: Not really. That said, having more contemplation time means you are more likely to have the time to research, and discuss reliefs or deductions that you might have otherwise missed.
- More choice of mortgages: If you are applying for a mortgage or remortgage the lender will want to see your figures. Until about August each year they will be satisfied with your previous tax return data but after that they will expect you to be up to date. Imagine not being able to move house / remortgage because you’ve been putting off your tax return!
If you’d like further support on submitting your tax return on time then contact our friendly tax team here.