Why would you want to file your tax return early?
The end of this month, for example, is the deadline for filing a paper version of the 2014-15 self assessment tax returns, and if you file online, the deadline is 31 January 2016.
A significant number of taxpayers still file after the deadlines and seem happy to pay the late filing penalties and interest on unpaid tax if any falls due. A remarkably larger number seem content to wait and file at the last minute. So what are the advantages of filing earlier? Two spring to mind:
- If any tax is due you will have more time to accumulate funds to pay it, and
- If you have overpaid tax you will get the money back sooner…
If you have a professional advisor there are additional benefits. It is possible to process your tax information and review your tax position prior to filing. This will ensure that no planning opportunities have been missed and any remedial actions can be taken before the return is sent to HMRC.
There are not many strategies that can be legitimately used in arrears, but there are a few. For example, in certain circumstances it is possible to pay charitable donations after 5 April 2015 and carry back the higher rate tax relief to 2014-15. If you want to make the most of the advice that we can give, give us time to research and plan. Bringing in your tax records in the last weeks of January to file the previous year’s tax return is counterproductive. The early bird really does get the benefit of reasoned tax advice and you will know, in advance, what your tax payments are likely to be for the next year.