There’s a lot of information to take on at the moment. The impact of the COVID-19 pandemic is rippling through different areas of our lives. Health fears, being socially responsible and simply working are all major factors.
Most people are under a lot of financial pressure, whether you’re an employee or own your own businesses. Even with significant government support, there is a huge drop in earnings across most industries. Furloughed workers have some security at the moment, but still have a shortfall in their monthly income and don’t know what their employment position will be in a couple of months. The pace of economic recovery is unpredictable. And the unknown is very difficult to plan for. Everything feels very immediate.
But, to a degree, you can take charge of your own situation and alleviate some of the uncertainty. Know your figures. You know what’s coming in and you know what’s going out. It also makes sense to know what your tax bill is going to be, well before the January deadline.
Self assessment tax return filing
This is quite possibly the last thing you want to think about right now. It’s not due until next January and you’ve got enough to deal with right now.
Well remember how surprised everyone was that it’s suddenly June? January is not that far away. And there are several financial hurdles to get over before then. We know this.
But it will help you to send your self assessment tax return in as soon as possible. You already have all the information you need, you might need to organise it, but it’s all there. If you’re employed, you should have got your P60 by now.
And let’s face it, January’s bad enough without the last minute form filling nightmare.
Please note: Filing early does not mean you have to pay your tax bill early. That deadline remains midnight on January 31st 2021.
Three benefits to filing your self assessment tax return now
- Accountants’ availability
January’s tax return and payment deadlines mean that this is a very busy period for accountants. As is the turn of the tax year in April. You’re more likely to be able to get an appointment with an accountant outside of these times. Even with all the restrictions, many accountants and tax specialists are still providing essential support to their clients just now. Whether it’s you’re regular person, or you need to consult a professional for the first time, now is a good time to make that call.
- Money organisation
Early tax return filing gives you another figure to factor into your financial planning. You’ll know how much you owe HMRC and can plan it in to your longer term budget. Knowing the precise amount means that you can set aside cumulative smaller amounts from now and avoid having to find a larger amount in January.
You can talk to HMRC to mitigate any concerns about not being able to afford your tax bill now. For example, if it’s less than £3,000 and you are also employed, you can arrange to pay it back through the PAYE system. The deadline to sort this out is December, but there’s no harm in sorting it out now. The sooner you let HMRC know there’s a problem, the more likely it is that you’ll be able to secure a reasonable solution with them.
You do not have to worry about wasting any money on financial penalties for missing paperwork or payment deadlines. Once your tax return is filed, that’s it done. Put your plan in place for paying your bill and you can stop worrying about that too.
- Tax refunds
Tax refunds and allowances for work related expenses are administered through your tax return. The sooner you get that tax return to HMRC, the sooner you can get a nice tax rebate cheque back from them. HMRC share your accountant’s busy periods, so now is a good time to get your tax rebate application in. Even with the extra work of their COVID-19 response packages, they are trying to keep to a good turnaround time for tax rebates. Everyone understands that a cash boost is even more welcome right now.
Basically, filing your self assessment tax return now:
- Gives you more control over your money, because you know what’s coming.
- Removes the worry of having to do it and the stress of costing yourself a substantial fine if you miss any deadlines.
- Gets your tax return money back in your bank account more quickly.
You’ve also got the opportunity to consult an expert to make sure you’re as tax efficient as possible. Just get it over and done with. And decide how you’re going to spend you tax refund.