Be a Self Assessment Earlybird! Benefits of filing your tax return early

Charles Dickens famously said “Never do tomorrow what you can do today. Procrastination is the thief of time.” That’s all very well, but did he ever have to do a self assessment?! 

Of all the things people tend to put off until the last minute, tax returns must be high on the list. According to HMRC, last year 1 million taxpayers left it so long they missed the January 31st deadline.

You can file a self assessment tax return any time from 6th April for the previous tax year, so “shop’s now open” for 2023/24 returns. While it’s tempting to leave it to the eleventh hour, there are actually several benefits to getting it done and dusted early in the year.

While it may not be the most glamorous task on your to-do list, filing early can save you time, money and stress in the long run. 

Who needs to complete a Self Assessment Tax Return?

Before we look at the pros of filing early, let’s clarify who actually needs to complete a self assessment. Typically, if any of the following apply to you for the last tax year (even for part of the year), you will need to send a tax return:

• You were self-employed, including working as a CIS subcontractor, and earned more than £1000 before expenses
• You were a partner in a business partnership
• You had a total taxable income of more than £150,000
• You had to pay Capital Gains Tax when you sold or disposed of something that increased in value
• You had to pay the High Income Child Benefit Charge
• You have any untaxed income – for example rental income, tips or commission, income from savings or investments or foreign income. 

If you are employed through an umbrella company, your tax is remitted to HMRC through the PAYE system. However if you have had any additional revenue during the tax year, including via the circumstances above, you may have to complete a self assessment. 

If you are not sure, HHMRC have this handy tool to check if you need to send a self assessment tax return.  

Benefits of early filing

Avoid the last-minute rush

Filing your tax return early allows you to avoid the stress and panic that comes with last-minute submissions. By tackling it ahead of time, you can spare yourself the headaches of technical issues (we’re looking at you Government Gateway), missing documents or unexpected delays.

If your tax circumstances have changed in the last year, for example if you have losses or an additional boost to your income, preparing your return early gives you time to seek advice and pull together the necessary financial information. 

Also, if this is your first year of filing a tax return, you will have to register with HMRC and get a login for the Government Gateway, which can take up to 7 working days. 

Know what you owe

Completing your tax return early means that you are aware in advance of any tax liability arising from it and will have more time to set aside sufficient funds to cover your tax bill. 

No matter how early you file, you still have until the normal deadline to pay any tax you owe. For the 2023/24 tax year, any tax payments will be payable on or before 31st January 2025. 

Get any tax refund quicker

If you are due a repayment of tax, it’s in your best interest to get your self assessment completed early on in the year. This is particularly relevant if you are a CIS contractor and have already paid 20% tax upfront. 

HMRC are less busy processing returns at this time of year, so you should receive any rebate fairly soon after your tax return has been submitted – and surely that money is better off in your bank account than HMRC’s! 

Smart tax planning

Filing early on in the new tax year gives you ample time to review your finances and identify potential tax-saving opportunities. You can explore deductions, allowances and tax reliefs that could lower your tax bill or optimise your financial strategy for the coming year. 

Avoid penalties

A lot can be said for taking your time to do things properly. Rushing your tax return results in errors and omissions that may lead to penalties. Missing the deadline for filing your self assessment can result in costly fines from HMRC. By filing early, you eliminate the risk of late filing penalties and potential interest charges on any tax owed. 

Get it done! Liquid Friday’s Self Assessment Service

As the year goes on, getting your tax return sorted is one of those tasks that can slip to the back of your mind. Then suddenly it’s Christmas and the deadline is fast approaching! By being a self assessment earlybird you’ll reap the rewards of reduced stress, potential tax savings and a smooth financial journey. 

To ease things even further, at Liquid Friday we’re now able to help you get your self assessment sorted. This service is competitively priced at £125, and if you are a Liquid Friday CIS Plus contractor, it’s included. 

Find out more about Self Assessment with Liquid Friday