The benefits of filing your tax return before the deadline date

It has been said that the two inevitable things in life are taxes and death. That being the case, it makes sense to pay your taxes or file your Self Assessment tax return well before its deadline.

There are two deadlines – one by the 31st of January and the other by the 31st of July.

Now every year, HM Revenue & Customs do write to tax payers to remind them about this. But many tax payers procrastinate and end up missing the January deadline each year. Consequently, they miss out on some of the advantages they can get out of filing returns early.

The advantages are as under:

Get Refunds Quicker

The first one is that you would get your refunds quickly as the HM Revenue & Customs department does not wait until or beyond the 31st of January to send back what is due to you. So if you have overpaid and file your tax return before the 31st of Jan, you can get the refund quickly so that you are able to enjoy the interest on that amount credited into your account, rather than letting it lie in the account of HMRC.


Manage Cash Flow

Cash flow management becomes easier when you calculate your tax liability well in advance. You are able to start saving for the amount to be paid and therefore would escape the penalties and interest payments you would have otherwise paid HMRC, should you file your tax return late.

Use Your Tax Code

There is one more advantage of filing your tax return well before the deadline and especially if your liability is under the amount of £3,000. You can have the liability paid through your individual tax code and that means smaller deductions from your salary or pension as the case may be on a weekly or monthly basis. This makes it easier for you to manage the outflow of cash and you need not pay a lump sum at one time.

Tax Planning And Reduction Of Errors

You also are better prepared to consider tax planning opportunities when you prepare your tax return earlier. This will take care of extra and significant gains you have enjoyed monetarily in a particular year or for that matter equip you to deal with losses as well in an organised manner.
Moreover, when you take the time to file your return early enough, you reduce the chances of errors. You are able to collect the necessary documents on time and not get into any last minute rush.

Save On Accountant Premium Charges

You would have observed or experienced that when you hand over documents to the accountant for filing return at the last minute, he is free to charge you a premium as he needs to very often pay his staff over time to ensure all returns are filed on time.
Approaching him early saves you those charges and you are also able to discuss finance and other tax related issues in a calm and unhurried fashion.

Don’t Have To Pay Penalties

Finally, since the HMRC have modified penalty charges and have introduced daily penalties of £10, it does not make financial sense to delay your tax return.

The above reasons are more than sufficient surely to motivate you to file your tax return. On the HM Revenue & Customs website, four simple steps have been outlined to help you in the process, from finding your online activation code, separating your businesses expenses from income, using their online service, and finally to submit your tax return.

If you still have questions or are in doubt, kindly view this video and seek the clarifications you require on the HM Revenue & Customs website.

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