Filing Self Assessment tax returns early – the benefits for cashflow and business planning

Filing Self Assessment tax returns early removes the last-minute burden and any potential late penalties or interest. More importantly, it will help you to plan your finances over a longer period.

It is important to note that filing your return early does not affect the date in which your tax is payable. The payment date is 31 January, regardless of when the return is submitted.

It also does not give HMRC more time to enquire, which is a common misconception.

When can I file my Self Assessment Tax Return?

Whilst the 31 January deadline may seem a long time away, completing your Self Assessment tax return now could significantly benefit your financial planning.

A Self Assessment tax return can be filed as early as the first day of a new tax year (6 April each year). For example, the end of the 2021/22 tax year is 5 April 2022. Therefore, a tax return for the 2021/22 tax year can be submitted from 6th April 2022.

For the 31 January 2022 deadline, HMRC reported that 630,000 individuals filed their return online on deadline day, with almost 21,000 completing it in the last hour before the deadline.

Aside from the potential for making a mistake, with a rushed last-minute submission, competing your return close to the deadline gives little time to arrange the appropriate payment of tax to be made on time.

When are Self Assessment Tax payments due?

The payment due date is always 31 January following the year-end. So for example, for the 2021/22 tax year which ends on 5 April 2022, the payment deadline for paying any self assessment tax liability (and Class 4 NIC) would be 31 January 2023.

In addition, payments on account are required towards the following year’s liability in January and July. these payments are 50% of the prior years liability, unless:

  • The last Self Assessment tax bill was lower than £1,000
  • More than 80% of all the tax owed has already been paid
  • Each payment is half of the tax bill in the previous year

The benefits of filing a tax return early

  • Peace of mind, that it has been completed and you know your upcoming tax liability
  • Financial planning for the year ahead by understanding out how much is owed, so payments can be planned, providing better cash flow
  • When a refund is due, you will be able to get this sooner
  • You will avoid any fines or penalties, which can be severe
  • Your tax bill is not due at the same time you file your return, so there is time to plan how to pay

Reducing tax payments by filing Self Assessment tax returns early

If you know your tax bill is lower than the previous year, you can ask HMRC to reduce your payments on account, which will reduce the amount you pay for the year ahead.

If you have already paid the July payment on account and the tax due is lower than the previous year, you may be able to request a refund or part refund. The following payment due on 31 January will also be lower, or you may not need to make an additional payment at all.

Filing Self Assessment Tax Returns – how Alexander & Co can assist you

Alexander & Co offers a comprehensive range of tax services, covering both personal and corporate tax.

For anyone requiring assistance with Self Assessment tax returns, our experienced team can help. Alongside completing your annual tax returns, we advise clients on a wide range of tax and accountancy issues, and constantly review their personal circumstances to ensure they only pay the correct level of tax they ought to.

To contact our team, please email, or complete the enquiry form below and we will be in touch to discuss your requirements.

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