The Advantages of Filing Your Self-Assessment Early
Posted 03 Sep 15
Although it isn’t difficult to do, self-assessment is one of the most dreaded tasks every company owner has to complete.
It can be easy to fall into a doomed circle of postponing it, until finally January comes and you realise you can’t avoid it anymore.
According to statistics, over a quarter of company owners completed their tax return in the final four days of January last year.
In just over five years, HMRC raked in over £70m in fines solely from those who filed their self-assessment late. Unfortunately, even though HMRC has introduced an online tool on their website you can use to complete your self-assessment, a lot of company owners still don’t manage to avoid the penalty fines.
Leaving your self-assessment to the very last moment makes you vulnerable in case anything happens - your internet connection fails, you can’t find the documents you need to provide, or you are struggling to understand the details of the self-assessment process. There is only one conclusion: the advantages of filing your self-assessment early are many.
In this article we will look at the main reasons why you should do it.
1. More time to save for your tax bill
If you file your self-assessment early, you will have more time to save money for any tax you owe. If your tax bill is due January 31st and you file your self-assessment in July, it gives you fill six months to plan your budget. It can be especially beneficial to make the arrangements ahead of time, since December and January tend to be financially straining (many cultures celebrate Christmas and New Year’s during this time).
On the other hand, if you file in January and realise you do not own enough money to pay your taxes, you’ll be in line for HMRC fine.
2. It’s easier to get help
There is no possibility you can predict every problem which can occur during the self-assessment period, especially if you file late and the HMRC’s personal tax helpline is constantly busy and waiting for hours only to be redirected somewhere else is a norm.
Even if you hire a professional accountant, it can be much easier to provide him/her with all the documents and records they need ahead of the deadline, so in case your situation changes, it can be updated immediately. Filing early will help you avoid the rush and get the help you need when you need it.
3. You will avoid penalties
This is an obvious point, but looking at the numbers for just a moment might reassure you that filing your self-assessment early is a great idea.
HMRC’s penalties can be infamously large, and here are just some of those you can avoid by filing early:
Instant £100 fine if you miss the January 31st deadline
£10 per day fines if you haven’t filed by the 30th April
£300 fine if you haven’t fined after another 90 days
Another £300 if you haven’t filed within a year
The best way to avoid problems, including penalties is by hiring a professional accountant, who will take care of your self-assessment process from its start to its completion.
At Tawanda Accountants we offer our clients a superior accounting service and ensure they never have to worry about recalling the list of documents they need to submit or the complex and exhaustive process of filing their annual tax returns.
We keep our clients up-to-date with each stage of the self-assessment process and provide them with help and guidance at any time.