Why it doesn’t pay to sit on your self assessment tax return

Why it doesn’t pay to sit on your self assessment tax return

 When you’re running a business, there’s a lot to consider and stay on top of. Daily deadlines, monthly deadlines, yearly deadlines, not to mention your responsibilities, as well as your employees’ responsibilities.

There are also work-related tasks and company-related tasks, such as filing your self assessment tax return, to consider. And, while HMRC may issue reminders at the end of the tax year, self assessment tax returns are yet another task that’s often completed by businesses at the last minute or late.

According to figures published by HMRC earlier this year, almost 10.7million taxpayers submitted their self assessment before January 31, with just over 30,000 people filing online in the final hour, between 11pm and 11.59pm. However, of the 11.4 million returns that were due, around 745,500 were still outstanding after January 31.

 

Aside from failing to meet a key business obligation within the agreed timescale, there are numerous reasons why businesses should complete their tax return on time or, where possible, early. We’ve listed three of them below:

  1. You won’t be fined

All late returns automatically incur a £100 penalty fine, which applies even if there’s no tax to pay or if the tax that’s due is paid on time. And if your return is more than three months late, the penalty can quickly become very costly. What’s more, HMRC are tightening the rules and the penalties are getting stricter, so it really does pay to get on top of, and stay on top of, your tax affairs.

  1. You’re less likely to make mistakes

Self assessment tax returns that are left to the last minute and then rushed through very often contain mistakes.

Miscalculating your tax means you could wind up paying too much or too little which, in turn, can leave you open to fines. You’ll also be liable for any interest on unpaid tax, if you’ve not paid enough.

  1. You’ll have a clearer picture of your business finances

Submitting your tax return early will enable you to see how your finances look sooner, rather than later. You’ll also be in a much stronger position to organise your cash flow accordingly so that you have the necessary funds to pay your tax.

Note: Just because you file your tax return early doesn’t mean you have to pay your tax bill at the same time. If you submit your return before December 31, you may be able to opt to have your unpaid tax collected through your tax code and PAYE system.

Got any questions or perhaps you’d like some advice or support in relation to submitting your next self assessment tax return?

We can take care of your self assessment tax returns, giving you peace of mind that you’ll never miss a deadline. We can also work with you to structure your affairs in the most tax efficient way to make sure you keep more of the money you work hard to earn.

For more details about how we can help, contact us on 01905 777600 or hello@ormerodrutter.co.uk.

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