Why complete your 2021/22 accounts and self-assessment tax return early?

For a competitive rate I complete sole trader and company bookkeeping and self-assessment tax returns.  The following details the key point as to why it’s better to be organised and file your self-assessment with plenty of time to spare, before the deadline of January 2022

1. Receive your tax refund earlier

There could be many reasons why you may be due a tax refund, including excessive payments on account based on your previous year's income or you could be a building subcontractor who have had tax deducted at source through the Construction Industry Scheme (CIS) and are often in a tax refund position.

You may also have experienced disruption to your business due to the COVID-19 pandemic and may find yourself in loss position which could generate a tax refund

Therefore, the sooner you file your tax return, the sooner any refund you may be due can be processed.

What better way to boost your cash resources than by claiming and receiving a refund from HMRC now?

2. Calculate your tax bill for cash flow planning

You could be currently trying to forecast your cash needs in the short/medium term and one of the biggest expenses you could have before the end of the tax year will be your income tax bill.

Knowing exactly how much your tax bill will be in January 2022 will help you to plan effectively for how you will be able to pay it, be that through bank funding or by preparing to engage with HMRC and asking for a phased payment arrangement when the liability falls due.

Remember just because you file your return early does not mean that you must pay the liability immediately. That only becomes due for payment in January 2022.

3. Not missing the tax return deadline

If you file your tax return late, you will be issued with an initial, automatic £100 filing penalty. It no longer matters how much tax you had outstanding. If your tax return becomes more than three months late, £10 daily penalties start to accumulate up to a maximum of £900.