The Self-Assessment Deadline and 5 reasons to file early
The Self-Assessment Deadline and 5 reasons to file early
January is that time of year when accountants up and down the land are tearing their hair out over the self-assessment deadline. Revenues, expenses and profits incurred in the year to March 2022 must be reported to HMRC and any tax due paid by 31st January. This blog post explains what happens if you miss the filing/payment deadline and five reasons to submit your 2022/23 tax return early.
Missing the self-assessment deadline
If you fail to submit your 2021/22 tax return and pay any tax due by 11.59 on 31 January 2023, your tax return will be late. This means you will incur a couple of different penalties:
- £100 late filing penalty – if your return is up to 3 months overdue. If you file your return more than 3 months late, you can incur higher penalties.
- Interest on late payments – for every day your tax return and payment are late, you will accrue interest charges at base rate plus 2.5%.
Income tax self-assessment deadline penalties are being harmonised with VAT late payment penalties so the regime will change for ITSA customers with business or property income over £10,000 per year from the tax year beginning 6 April 2024, and for all other ITSA customers from the tax year beginning 6 April 2025. More information is available from HMRC website.
Why should you consider filing your 2023/24 tax return early?
There are a few reasons why it’s a good idea to get your tax return submitted early:
1. Minimise risk of mistakes
Filing your tax return on 31st January is stressful for you and your accountant. There’s a much higher risk of errors being made or data being omitted if you are pushing yourself or your accountant right to the deadline. By getting your data into HMRC in the first half of the tax year you can avoid expensive mistakes.
2. Avoid penalties
Late payment penalties are due if you are even one minute past the self-assessment deadline of 11.59 on 31st January. Early submission doesn’t mean you have to pay your tax early but it means you can avoid the risk of missing the deadline. It’s not uncommon for the online portal to have issues in the run up to 31 January due to the heavy volume of users.
3. Avoid shocks at the self-assessment deadline
When you submit your tax return earlier in the year, you’ll know exactly how much tax you owe months before you need to pay. This can avoid a huge shock at the end of the tax year leaving you no time to plan for payment.
4. Earlier refund of overpayment
If you are due a refund of tax this will usually be repaid within around 6 weeks of you submitting your tax return. By leaving submission until the self-assessment deadline, you are delaying your tax refund. That money could be working harder for you rather than earning interest for HMRC.
5. Time to save up for the bill
If you haven’t been putting money aside for your tax bill during the year, by filing your 2022/23 return as early as April 2023, you’ll have around 9 months to save up before you have to hand it over to HMRC. Leaving your tax return to the last minute means you may not know in advance how much you will need to pay.
Getting support to beat the self-assessment deadline for tax year 2023/24
Let us support you to get ahead of the tax return deadline in January 2024. Contact David Masih, our client relationship partner to learn more about how we help you save tax and take advantage of all the reliefs that are available to you. Call 03330 067 123 or email info@onthegoaccountants.co.uk.
You may also be interested in:
Charity donations and tax relief
