With the deadline for filing the paper returns of the Self Assessment Tax Return approaching, taxpayers are scrambling to prepare for their tax returns. Even though the deadline for paper returns is a month away and online returns are a few months away, it is always better to file your tax returns early. Let us explore the numerous benefits of filing your Self Assessment Tax Returns early.
Who Needs to File Self Assessment Tax Returns?
Self Assessment Tax Returns contain the details of a taxpayer’s accounting and investment activities throughout the previous tax year. So, taxpayers must file the returns for the tax year 2023/24 by 30 October 2024 for paper filing and 31 January 2025 for online filing. However, not everyone needs to file their Self Assessment Tax Returns. You are required to file the tax returns only if the following applies to you:
- Your annual taxable income is more than £150,000
- You were self-employed and earned more than £1,000
- You were a partner in a business partnership
- You had to pay High Income Child Benefit Charge
- You had to pay Capital Gains Tax on the chargeable gains when you disposed of an asset
In addition, you might also have to file for tax returns on untaxed income like rental income, income from savings, investments, dividends, foreign income, tips and commission.
What Are the Benefits of Filing Your Self Assessment Tax Returns Early?
Every year millions of UK taxpayers put off their tax returns filing until the last moment. The deadline day for Self Assessment Tax Returns is the busiest day for HMRC. HMRC collect millions of pounds in penalties due to taxpayers missing their deadline. On top of that, taxpayers are required to notify HMRC by 5 October if they opt for paper filing, which is almost 25 days prior to the deadline.
Filing your Self Assessment Tax Returns early has numerous benefits rather, unlike procrastinating and putting it off until the last day. Here are some benefits that could make you better prepared:
1. Only Available to Individual
Filing Self Assessment Tax Returns requires a number of documents, such as bank statements, invoices, P45, P30, and P11D forms, which must be prepared early. In addition, you will need a Unique Taxpayer Reference (UTR) number. You have to request HMRC for the UTR number and then use it accordingly in your paper or online returns. Preparing for all these may take time, so preparing early can be beneficial to avoid penalties and file tax returns within the deadline.
2. Claiming Reliefs
You could be eligible for various reliefs that can take some time to claim. For instance, if you are liable for Capital Gains Tax and you disposed of your main residence, you could be eligible for the Private Residence Relief. In this way, you could save a big amount of tax liabilities if you are prepared early.
3. Avoiding Penalties
One of the major reasons to file your tax returns early is to avoid penalties. The penalties for missing the deadlines are:
Deadlines | Penalties |
|---|---|
Missing the deadline day | £100 instant penalty |
Up to 90 days | £10 per day |
Another 90 days | £300 penalty or 5% of the tax you owe, whichever is greater |
If you still have not filed within a year | £300 penalty or 5% of the tax you owe, whichever is greater |
Intentionally delaying your filing | Up to 100% of owed tax |
4. HMRC Support
HMRC call centres will be particularly busy during the deadline season for filing the tax returns. So, if you have any questions or confusion regarding your Self Assessment Tax Returns, it is better to prepare early, as HMRC will be available during the year. According to HMRC’s data, the average waiting time for callers is almost 14 minutes, and 49.2% of callers have to wait for more than 10 minutes.
All in all, for better preparation and avoiding penalties and any last-minute surprises, it is always better to file your Self Assessment Tax Returns early. If you are thinking of filing paper returns, you have to complete your returns today and notify HMRC before 5 October. However, if you are still not prepared, you can contact UK Property Accountants and get expert help today!
Conclusion
Filing your Self Assessment Tax Returns early is a smart move that ensures better preparation and organisation. It also helps you avoid unnecessary penalties and last-minute stress. By preparing early, you have more time to gather the necessary documents, claim potential reliefs, and seek support from HMRC before the rush. Whether you are filing paper returns or opting for online submissions, being prepared can save you time, money, and potential headaches. Don’t wait until the last minute—get started now!
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