Everyone knows that the tax year ends on 5th April. Everyone also knows that you can submit your self-assessment from 6th April, if you have all the information. Everybody, however, does not file their self-assessments on this date……or anywhere close to this date. On 31st January 2020, 26,562 people left it until between 11pm and 11:59pm to submit their self-assessments and 958,296 missed the deadline completely. It is one of those jobs that gets left and left and left until you get to January and then start panicking. Why should I get my self-assessment submitted early? I hear you ask. Well, read on and we will tell you.
Firstly, it is going to save you money, as if you do leave it to the last minute and then end up being late you WILL be fined by HMRC.
- A £100 instant fine if you miss the January 31st deadline.
- £10-per-day fines (for up to 90 days) if you have not filed by 30th April
- A £300 fine (or 5% of the tax you owe – whichever is greater) if you still have not filed after another 90 days.
- Another £300 fine (or 5% of the tax you owe – whichever is greater) if you still have not filed within a year.
Filing your self-assessment early could also mean you may need to pay less tax on account in July. You may not have earnt as much as last year so your July payment on account may well be adjusted.
Time to Budget
You will have time to save for your tax bill. If you file your self-assessment early, your tax bill still will not actually be due until January 31st. Knowing how much tax you need to pay gives you time to save so that you can make your payment on time.
Busy, Busy, Busy
If you are going to leave it until January to file, then please remember the following:
- Lots of other people are also probably going to file in January too. This could mean that if you have a query and need to speak to HMRC you could be in for a long wait…if you manage to get through.
- In the same token, your bookkeeper or accountant is probably being inundated in January. I am sure you could become their favourite client if you filed a few months earlier.
If this is your first time completing a self-assessment, then you need to bear in mind that registration takes time. You need to be registered first before you can file a self-assessment. You may also require other information in order to access the online services which may be sent to you in the post. You can imagine how long it could take to get this information.
For more information about registration and filing your self-assessment click on the link:
We are all aware about how time-consuming self-assessments can be and that goes for the preparation too. To file your self-assessment, you need lots of information like P45s, P60s, bank statements etc. If you are filing in January, some of the information you need could be nearly 2 years old and harder to get hold of so could delay you getting it done. HMRC won’t accept ‘I couldn’t get my bank statements’ as an excuse. Make sure you do not need any excuses and try and get it done as soon as you can.
Don’t forget…it might not be bad news. If you have overpaid tax during the last year, then you could be due a refund. If you have filed your self-assessment early, then you will know about and receive the potential refund sooner. Imagine having to decide what to do with extra money that you did not know you were due?
Finally, just sit back and think for a minute. Imagine that its August and your self-assessment has been filed. You know how much tax you owe and to be honest, it was not as bad as you thought. You have put together a budget so that you have the money to pay the tax bill in 5 months’ time. You can now concentrate on running your business without worrying, and come January, well, you can maybe explain to other not so organised business owners why your so relaxed! Imagine that 😊
If you have any queries or would like to talk about your self-assessment, then please feel free to contact us. We would love to talk to you.