Self assessment tax returns, deferrals and why early is better this tax year…

This last financial year has been a challenging one for many; deferred tax payments, grants and coronavirus could make this year’s tax return a little tricky in terms of what you may owe.  The earlier you know what your tax bill is likely to be, the earlier you can plan so that you aren’t caught out in January. This article will outline why earlier really is better this year, don’t leave it to the last minute.

Cashflow

Tax payments due at the end of July 2020 were able to be deferred until 31 January 2021.  If you didn’t make your payment on account in July, you will have double the amount to find in January. If you complete your tax return early, you will know exactly how much is due and you can plan for it accordingly.

On the positive side, if you are owed money by HMRC you may be able to claim this sooner. The earlier you fill out your return, the faster you'll be able to receive any repayments or tax rebates back. Employees and directors can sometimes be eligible for refunds, and HMRC does sometimes make mistakes. Refunds usually take longer when issued in January as all the last minute returns make it HMRC's busiest time.

Tax planning

If your circumstances have changed in the last year, or you have some key decisions coming up, completing your tax return early will help you to look at the full financial picture.  Clarifying the future now, is essential to making important decisions.

Organisation and stress

This year has been unpredictable and turbulent for all businesses. Addressing your tax return early is within your control; it’s an action that you can take that will alleviate stress and provide you with a clear picture and timeline of what you owe and when.

If you have any questions or need assistance with your bookkeeping and other tax return activities please do get in touch with your Swindells partner who will be able to advise you