Have you done your tax return yet? It’s one of those jobs that you may want to put off, but delaying the process tends only to cause more problems.
The last tax year ran from 6 April 2020 – 5 April 2021 and the deadline for filing a paper tax return is midnight on 31 October 2021. If you’re filing online, the deadline is midnight on 31 January 2022.
In any event, you must pay what you owe by midnight on 31 January 2022.
If you claimed any COVID-19 emergency support between April 2020 and April 2021, you’ll also need to declare it in your tax return.
Any grants relating to the self-employment income support scheme (SEISS) and small business grant fund (SBGF), are subject to income tax and self-employed National Insurance.
Why put it off?
Some people delay their tax return for fear of the size of the bill. But delaying your filing only makes the anxiety worse.
There’s no avoiding what you owe in tax, and if you’re late in filing, you’ll only increase your bill through late filing penalties.
However, by working with us, we can ensure you are using all the allowances available to you, which may legitimately reduce what you owe by surprising sums.
Reasons to file your tax return early
Clarity
Gathering all of the information to prepare your tax return can be cumbersome. But if you take action early, there’s plenty of time to ask your questions and clarify everything you need.
If you’ve received SEISS or SBFG grants, you may have additional questions this year about how to account for them.
Accuracy
If you give yourself enough time, you’ll have plenty of opportunities to amend anything.
Occasionally errors crop up in the tax return process. If you start early, you’ll be able to rectify any little mistakes, miscalculations or forgotten sources of income.
Peace of mind
Once it’s ticked off the list, sorting out your tax return will give you peace of mind. You’ve tackled the daunting task, and you’ll know what you owe.
You’ll have no scary surprises when it comes to payment by 31 January 2022 and you can plan your business for the outgoing.
Avoid the last minute chaotic scramble just before the deadline, with sleepless nights, and unnecessary stress.
Spreading the cost
You can mitigate the impact of a larger tax bill if you begin the process early.
There’s usually a second payment deadline of 31 July if you make advance payments towards your bill. By finding out what you owe, and making payments in advance, you’ll be able to manage your cashflow more effectively.
Payment buffers
Give yourself enough time to effect payment. While most payment methods are same-day, it can take three days to process a BACS payment, a direct debit or a cheque.
If it’s your first time setting up a direct debit with HMRC, it can take five days for your direct debit to clear. If you’ve left payment until the last minute, you could end up with a late payment fine.
Avoid the fines
Being late with your filing results in a penalty of £100.
That penalty increases if you’re more than three months late. And you’ll pay interest on top of that.
All of this can easily be avoided by getting the return done now – it’s simply not worth the stress and the extra cost of leaving it late.
We can help
We can help you with your tax return, so don’t put it off.
Please get in touch now to get your tax return sorted and avoid all the problems of leaving it to the last minute.
