You might not think about your 2013/14 tax return until 31 January 2015 but there are some great reasons why could choose to file a paper tax return on 31 October this year.
1. Don’t have to pay tax until 31 Jan 2015
Submitting your tax return early doesn’t mean HMRC will coming knocking at your door for a payment. You will only be obliged to pay your return on the due dates: 31st January 2015 (balance and the first payment on account); and 31st July 2015 (second payment on account).
2. Your ‘Tax Refund’ can earn you interest
Filing a tax return before you are due will initiate the tax refund process as HMRC doesn’t wait until 31st January to pay you. If you think you’ve overpaid and are due for a refund, you should really prepare your tax return as soon as possible. This will ensue the cash you get earns interest in your bank account, not HMRC’s.
3. Better cashflow management
If you file your tax return and calculate any tax liability beforehand you will get time to start saving for the bill when it’s due. This will help you better manage your cashflow.
4. No penalties
Filing a late tax return results in £100 fix penalty. Paying before you’re due keeps you clear.
5. Collecting your Tax credits
If you are entitled to tax credits or benefits, you can inform the tax credits office about your income and they’ll renew your claims by 31st July every year.
6. Professional help is expensive during peak season
Finding help from a professional accountant during peak tax season can be expensive. It would be worth your time to seek an accountant early.
7. Contacting HMRC can be difficult
Trying to get hold of HMRC during peak filing season (around deadlines) is very difficult. Leaving your tax affairs to the last minute can also leave you vulnerable to longer turnaround times.
This year around 10.7 million people are expected to file a self-assessment tax return with around 15% of these expected to file a paper tax return on 31 October. Missing the deadlines result in a £100 late-filing penalty. There are further penalties after 3, 6 and 12 months. It’s advised that you either seek advice of a local tax accountant or call HMRCs self-assessment helpline on 0300 200 3310.