A press release issued by HM Revenue & Customs (HMRC) has confirmed that over half a million taxpayers submitted their 2011/12 tax returns online on the 31 January 2013, making the 31 January filing deadline the busiest day for the submission of returns.
As the 2012/13 tax year ends, HMRC will shortly start issuing tax returns to those within Self-Assessment. HMRC’s statistics indicate that for many the completion of their return will be a low priority at this time, but there are genuine advantages to completing your tax return early.
1. Receive your repayment as early as possible
Where a tax return shows a repayment is due, the repayment will only be issued once the return has been processed. Therefore, any delay in the submission of the return will result in a delay in receiving the repayment.
2. Make a reduced payment on account in July
In some cases a repayment is due where too much tax has been paid on account in the year. One option is to complete your tax return before the second payment on account falls due on 31 July 2013. This may enable you to make a reduced payment at that time.
3. Spread collection of your tax liability over the next tax year, avoiding a lump sum payment in January
Where a return shows a tax liability of £3,000 or less, it may be possible for payment to be collected via your PAYE code. Collection is spread over the course of a tax year, and no payment is required by 31 January. However, the return must be filed online by Christmas for the liability to be ‘coded out’.
4. Budget for any tax liabilities
The main danger in delaying the submission of your return is that you may face an unexpected tax liability. If this happens, it is possible to agree a payment plan with HMRC, but the plan needs to be agreed before the 31 January payment deadline. Leaving the completion of your return until the last minute gives you little scope to put an agreement in place.
5. Avoid penalties and interest
With increased penalties for late returns, and surcharges and interest charged where tax is paid late, any delay in the submission of your tax return can also prove expensive.
All in all, there are real benefits to submitting your tax return early – not least the sense of satisfaction in knowing it’s done for another year!
The information in this article was correct at the date it was first published.
However it is of a generic nature and cannot constitute advice. Specific advice should be sought before any action taken.
If you would like to discuss how this applies to you, we would be delighted to talk to you. Please make contact with the author on the details shown below.
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