It's 11 pm on 31st January, you're sitting at your kitchen table and you're rushing to get your self assessment tax return submitted before the midnight deadline.
You've frantically scrabbled together your paperwork along with what receipts you could find and you're desperately making your way through the submission, hoping you won't have too much tax to pay.
You're tired, you've just run out of coffee, and what's worse, you're in such a rush that you're pretty sure you've made some careless mistakes in your tax return, but the thought of a hefty fine for submitting late means you won't have time to go back and fix them.
As the deadline approaches, and the thought of a busy day tomorrow looms ahead, you wish you'd started your tax return sooner so you could avoid this stress.
No one wants to be in this position.
Whether you're a master of procrastination or just flat-out busy, the thought of doing your tax return before the deadline begins to loom might seem unlikely. But getting your ducks in a row and submitting early will save you money and remove the stress and anxiety around filing last minute.
Instead, picture the following scene.
It's 10th June, you're having a quieter day than usual, so you've decided to get a head start on preparing your self assessment tax return. After rushing to submit your tax return in January last year, you're keen to avoid the stress and get ahead of the curve.
As you gather all your information and go through the process, you're surprised at how much simpler it feels this time around when you're not scrambling to get it done on time. You take your time double-checking information and ensuring everything's correct before hitting submit.
After you file your return, you know exactly how much tax you need to pay there and then, so you set this aside in your bank account for January's deadline, feeling pleased that you're this organised with your cash. Who knew getting your tax return done could be this easy and stress-free.
So which situation would you rather be in?
If you're not already convinced, here's 4 reasons why you should submit your self assessment tax return early this year.
1. You'll be able to plan for your tax bill.
Want to save as much tax as possible? Get a head start with your self assessment!
When it comes to taxes, failing to plan is planning to fail. No one wants to be in the position where they file a return in January, only to find they don't have enough cash to pay their taxes. Starting the self assessment process early avoids a situation like this by giving you an idea of how much tax you'll have to pay come January, helping you save and plan your taxes well in advance.
Let's say you file your return in June– you'll have a whole seven months to budget for any tax you owe. You can then set this aside so it's there ready to pay (or put it into a 'space' if you use Starling).
What's more, you'll get that smug feeling of knowing you're super-organised with your taxes and you won't have any penalties to pay. Plus, future-you will thank you come January!
2. You'll remove the stress and anxiety of filing last minute.
Remember the kitchen table scene we set out at the start of this post? Getting submitted early means you'll never have to face that situation.
Whether you submit your tax return yourself or pay an accountant to do it for you, getting a head start on your submission means you'll never have to deal with the stress of scrabbling around trying to find information at the last minute, especially during the Christmas period.
We find that leaving something to the last minute gives you less time to react if things go wrong (and they always do seem to go wrong at the last minute). Whether it's losing your Unique Tax Reference, forgetting your Government Gateway password, or HMRC's online systems crashing at 11.59 pm on the day of the deadline because everyone else is scrabbling to get submitted on time (yes, this really does happen!), getting your tax return done early removes the unnecessary headache of dealing with stressful situations or unexpected bumps in the road.
3. You'll avoid fines and last minute penalties.
Putting off your tax return for as long as possible, or forgetting about it altogether, could land you in a difficult situation. If you miss the deadline for submitting your return, you'll be faced with a £100 fine from HMRC and more if you pay your tax late!
Waiting to file your tax return at the last minute makes you more likely to miss the deadline and rack up fines and penalties. And rushing to get filed last minute also puts you at risk of making mistakes which means... yup, more penalties.
Staying ahead of the curve and submitting your tax return early will remove this risk altogether, giving you peace of mind that you'll avoid any nasty surprises or unexpected additions to your tax bill come January.
4. If you're owed a refund, you'll get it sooner.
If you're in the lucky camp of business owners who have paid too much tax and are owed a tax refund, this money will hit your bank account sooner if you file your tax return early.
And if you're really smart, you'll squirrel this away to cover your next tax bill in January, which means good news for your business's cash flow. Or you could use it to treat yourself for getting your Self Assessment done early– whatever floats your boat!
How early can I submit my tax return?
You don’t have to wait until January to file your self assessment tax return. As soon as the tax year ends, you can complete your tax return at a time that suits you. HMRC accepts completed tax returns for the 2020 to 2021 tax year between 6 April 2021 and 31 January 2022, so there's no time like the present.
(Oh, and if you say you want to get submitted early, you'll probably make your accountant's day too.)
No one wants to be rushing around and getting fined for submitting their tax return late. Stay ahead of the curve and get yours filed early to make self assessment a breeze.
