What are the benefits of filing tax returns early?
Completing and submitting tax returns is a daunting, cumbersome, and stressful experience. The experience can become worse if you are going to file your returns at the last minute. Likewise, HM Revenue & Customs is also pushing taxpayers to file online self-assessment returns early so that they can save themselves from the last-minute rush.
And if you fail to file your returns before the deadline, it will result in heavy penalties and fines. There are many benefits of filing your returns early. We are listing some of them in this article.
Early Tax Refund
The biggest perk of filing your self-assessment early is that you will get an early tax refund in your account from HMRC. If you have paid more than what was actually do in terms of taxes, it means HMRC owes you a refund. So, it is better in such circumstances to prepare tax returns as early as possible.
There’s a common misconception that HMRC waits for processing tax refunds only after the deadline expires. Fortunately, this is not the truth. The more early you find the tax return, the sooner HMRC starts processing your tax refunds.
Additional Opportunities for Tax Planning
Like all other parts of the world, we are passing through uncertain and difficult times. Against the backdrop of the pandemic, it becomes immensely important that you must save yourself from financial shocks through proper tax planning.
Therefore, it is recommended to get rid of your tax liability as soon as possible. Doing so will give you peace of mind and will save your future. Also, now that you know that you have got yourself rid of the tax liability, you will start planning your tax returns for the next year. It means you will have ample time to avoid any penalties and fines.
Avoid Fines & Penalties
One of the biggest, if not the biggest, perk of filing your tax returns before the deadline is that you will save yourself from uncalled trouble that appears in form of penalties and fines. It means that filing your tax returns timely gives you additional peace of mind.
You file your self-assessment tax return a day after the deadline, HMRC will slap a fine of 100 British Pounds. The more you get late, the amount of the fine and penalties will increase. Thus, filing your returns before the deadline saves you from additional trouble.
Furthermore, if you have made a mistake in your returns, then you will have ample time to rectify it.
More focus on the business
By filing your returns early, you will have extra time to focus on your business and to take it to new heights. Again, the pandemic has the worst effects on nearly all sorts of businesses, hence by filing the returns early, you will get additional time to get your business back on track.
Cash Flow Planning
At present, several businesses are actively working on cash flow planning to get estimates about their medium-term and short-term cash needs. The biggest expense that they have to get rid of before the tax year expires is the tax bill.
Once you have figured out how much you have to pay in terms of taxes, it becomes more convenient to correctly forecast your cash needs in short-term and medium-term periods.
Correspondence with HMRC
Correspondence with HMRC becomes more difficult when the deadlines approach as they become very busy in these days due to increased workload.
So, it is better to file early tax returns. If for any reason, a need for correspondence with HRMC arises, you can reach out to them more easily. During peak hours, the workload increases five-fold. So, you can just imagine how difficult it becomes to correspond with officials.
How can we help with self-assessments?
Personal Accountant is a team of highly-qualified and chartered accountants and certified tax advisors. We can help you in preparing and submitting tax returns timely, promptly, and correctly.
Also, our experts reduce your tax liability to the minimum-threshold through their updated knowledge about current tax laws, reliefs, and grants.
We take pride in announcing that our accountants and tax advisors have saved hundreds of thousands of pounds for their clients legally in terms of tax payments. We will be more than happy to assist you in a similar fashion.
All you need to do is to drop your contact details and our expert will reach out to you for 15-Minute free expert advice. Yes, you read it right! Absolutely free 15-Minute call.