On 6th April every year, HMRC sends letters out to everyone who is registered, reminding them to file a self-assessment. This year, my clients seem to have noticed this letter more than usual, perhaps because they have more time on their hands or perhaps because the imminent June cash grant is on their mind. I’ve had more enquiries than ever. So far (in the last 3 weeks) I have started the process for 8 of my clients and completed tax returns for 4. Last year 25% of my clients 2018/19 tax returns were filed in January. My target is to reduce this to 10% in January 2021 (having 90% completed before Christmas holidays). The deadline for your 2019/20 tax return is 31st January 2021, but not everyone realises that you can file any time between 6th April 2020 and 31st January 2021. The deadline for payment is still 31st January 2021, but if you file earlier you will benefit from being told what is due in advance.
So here’s my top 5 reasons to file your tax return early.
1. Good financial planning. You will find out how much you need to pay way in advance, so you can save for it OR if you have already set an amount aside – congratulations – you now know whether you have over or under budgeted. Remember, depending on your level of profit, your tax bill may include 20% tax, 9% NI, 15% student loan and payment on account.
2. Fresh in your mind. The closer to the 6th April, the more likely you will be to still have your paperwork and remember those “out of pocket” expenses that are relevant to your tax return.
3. Relevant. You can use your final figures to set your budgets / targets for next year and help with your cashflow. It is generally wise to have your finances in order. 5 reasons to file your tax return early.
4. Avoid fuelling SAD (seasonally affected disorder). Everyone is happier when the weather is nicer… in Spring and Summer. November to January are depressing, let’s face it, so get your tax return out of the way while you are in a relatively good mood, and there’s no deadline looming.
5. Peace of Mind. When everyone else is in a panic after the Christmas break, you can be smug and those tax return deadline adverts on the radio in January won’t send you into a panic.
If you are already a client and want to know what you need to do so that I can complete your tax return early, let me know. If you do your own tax return but want some reassurance that you are doing it right, I offer one off consultation calls with email follow up for a set fee, contact me for more details on firstname.lastname@example.org.
If you need an accountant for the first time or you are thinking about changing accountants, have a look at my website https://carolineboardmanconsulting.co.uk and Facebook page https://www.facebook.com/cbclimited.uk to see if you think we could be a good fit.