Yes, ladies and gents, it’s that time of year again when every accountant for miles around seems to be talking about nothing but getting your tax return filled in on time. While the deadline for physical submissions has been and gone, the online deadline of January 31st is almost upon us. And we’ve all heard the arguments – make sure you don’t attract any fines, keep your house in order, don’t miss the deadlines. And while all the reasons they give to file your returns on time are true, not many people will tell you about the benefits of getting your tax return early. If you have a love-hate relationship with your tax return that leaves you always rushing around at the last minute, there are a few benefits to early filing that might change your mind.
Plan Your Finances
The one thing that many people forget is that the deadline for online submissions of the 31st of January is also the deadline for payments. This means that after spending a few days stressing and filling in paperwork, you also have to part with a chunk of money. Which kind of takes the shine off the brand new year. But, if you fill in your tax return and file it early, you will be aware of the total amount for any balancing payments you will need to make, with time to prepare for paying it on January 31st. This means you can plan your cash flow around this payment, and make sure that the enthusiastic Christmas spending doesn’t mean you fall short on deadline day.
Use Your PAYE Code
Another cash flow benefit is the ability to utilise your PAYE code properly. If you file your return and discover that your total tax liability is less than £3,000, you have options to work with. If you pay the majority of your taxes through your PAYE, you can opt to have the underpayment collected through your PAYE code throughout the year. This means you aren’t out of pocket by £3,000 and you can spread the cost across the year. This gives you a nice boost to your cash flow and helps you plan more effectively.
Avoid Unwanted Attention
It’s a well-known fact that tax returns prepared at the last minute are often prepared in a panic. This means they are more likely to contain errors, and quite often silly ones. Despite what many might say, ultimately it’s the tax payer (that’s you) who is liable for these mistakes, not your accountant (if you use one). So if a penalty is issued for errors, you will be the one to pay for it. These penalties can include missing the filing date (a penalty of £100), inconsistencies, understating tax or misrepresenting the tax liability. Not only that, but it’s often the last minute tax returns that come under extra scrutiny from HMRC.
As specialists in small business accounts, we understand the pressures of a small business. Day to day running is puts a lot of pressure on your time, and finding time to fill in a tax return can feel impossible. At Cove Accountancy Services, we specialise in helping small businesses manage their tax affairs. This can include preparing and filing corporate tax returns, correspondence with tax authorities on your behalf and investigate or file for any relevant tax reliefs. If you would like help putting together your tax return and gaining these benefits, http://www.coveaccountancyservices.co.uk/contact-us/just get in touch with us today.