The following are the main reasons why you should file your self assessment tax return on or before 31 October 2013:
1. Tax payments
Even if you file your tax return now, you will only be obliged to pay your return only on the following due dates: 31st January 2014 (balance and the first payment on account); and 31st July 2014 (second payment on account).
2. Tax refunds
Ideally, if you file your tax return before the filing deadline, you would receive any tax refund due fairly soon – HMRC does not wait until 31st January to pay you. Therefore, if you think you’ve overpaid tax and a refund is due, you should really prepare your tax return as soon as possible so that you can get the cash that earns interest in your bank account, not HMRC’s.
3. Cashflow
Filing your tax return and calculating any tax liability beforehand gives you the time to start saving for the bill and to manage your cash flow.
4. Penalties
Paying before time keeps you clear of penalties.
5. Tax credits
If you are entitled to tax credits or benefits, you can inform the tax credits office about your income and they’ll renew your claims by 31st July every year.
6. HMRC
Like all important things during important times, trying to get hold of HMRC during peak filing season (around deadlines) is very difficult. Leaving your tax affairs for later might also leave you vulnerable to longer turnaround times.
7. High professional cost during peak season
Enrolling a professional accountant’s help during peak times can be expensive.
HMRC’s slogan tells us that ‘tax doesn’t have to be taxing’, but the standard tax calculation guide provided by them runs into 16 pages! And, if you have other types of income such as capital gains, you will need a more comprehensive tax calculation guide – this one is over 32 pages in length.
