For many people, getting the information together to send to your accountant to complete the Self Assessment Return causes a sign of dismay. You know you need to do it, but the deadline is 31 January, so you put it off again and again. Before you know it, it is Christmas and the reminders received from your accountant are still sitting in your inbox waiting to be actioned. There is no avoiding it anymore as the deadline is only weeks away. At 31 December 2018, 5,541,784 taxpayers still had to file their Returns in the month of January (this represents 48% of the Returns issued by HMRC). More than 700,000 of these were filed on the last day of January! Below are some very good reasons to get the information together early this year:
Reason 1 Sometimes the tax liability due by 31 January is higher than expected. It can come as quite a shock and you could have done with knowing the amount sooner so you could save for it. Allow yourself time so you can organise your cashflow and allocate funds to cover the bill.
Reason 2 There could be information missing and you need to contact a third party to obtain it. You will not always be able to obtain this information straight away so allow time for this problem.
Reason 3 There are penalties for late filing so dealing with matters earlier reduces the risk of this happening.
Reason 4 It could be that you are due a refund of tax. The sooner the Return is submitted the sooner you will get your tax refund.
Reason 5 Sometimes you send your information to the accountant and they have queries that need to be resolved or additional information may be required and there needs to be enough time to deal with this if the Return is to be submitted by the deadline.
Reason 6 You may have to make payments on account for the following tax year. In some cases, it can be possible to reduce these. Allow time for your advisor to review this.
Reason 7 It can play on your mind that you still need to deal with the Return. Reduce this stress factor by getting it out of the way.
Reason 8 Unfortunately, there are occasions when the internet/technology lets us down. Typically, at the worst possible moment. Leave yourself plenty of time to resolve these issues.
Reason 9 If you don’t have an accountant and at the last minute find you need one, it can be difficult to find one that can take your work on and meet the January deadline. The above HMRC statistics give some idea about how busy they are in January.
Reason 10 If you want your tax liability to be coded, the return must be submitted to HMRC by 30th December.
Why not make it a goal this year to send the information to your accountant before the Summer.