The Self Assessment season can be a stressful time. Thankfully, it’s over now – at least for those of you who made the deadline… Hopefully you managed to make the January 31 deadline with plenty of time to spare!
Although tax returns are famously stressful, it doesn’t have to be this way. Filing early is obviously the most straightforward way to avoid last minute stress. Here are our top reasons to do it:
1. HMRC’s call centres are always overwhelmed in January
If you’ve ever tried to get hold of HMRC’s personal tax helpline in January, you probably know their ‘on-hold’ music off by heart. HMRC aren’t renowned for their customer service and this reputation is well deserved.
Worst of all, HMRC’s phone line wait times look set to get even worse over coming years due to departmental cuts. If you want to make your Self Assessment as painless as possible, don’t leave it until the last minute. Getting in touch with HMRC outside of their peak times is far less frustrating.
2. If you’re owed a tax refund, you’ll get it sooner
HMRC not only taketh away, they also giveth. Some business owners overpay tax and are owed a tax refund. If you’ve overpaid tax, you’ll find out when you file your Self Assessment.
Your refund won’t be immediate (remember this is HMRC we’re talking about), but should only take a few weeks.
3. You’ll avoid HMRC’s late filing penalties
Naturally, the earlier you file, the easier it is to address any problems and avoid HMRC’s late filing penalties. In case you didn’t know, these are:
- An initial £100 fine if you miss the January 31 deadline
- £10 a day fines if you haven’t filed by April 30
- A £300 fine if you don’t file for another 90 days
- Another fine of £300 or 5% of your tax owed (whichever is greater) if you don’t file within a year
- Addition penalties – including a fine of £100 of tax owed – if HMRC thinks you’re delaying your filing on purpose.
These fines aren’t pretty. It’s always best to err on the side of caution when it comes to Self Assessment.
4. You can have a proper Christmas break
Because the deadline falls in the New Year, tax return and festive chaos often coincide. If you don’t have tax on your mind, recharging your batteries at Christmas is much easier (family chaos notwithstanding!). Get it out of the way and really relax over Christmas.