Every year thousands of taxpayers leave the submission of their self-assessment tax return to the last minute. However, with so much happening in 2020, an early submission could prove very beneficial.
Taxpayers have until 31 October to make a paper submission of their return to HM Revenue and Customs (HMRC), however, most individuals now file using an online submission giving them until 31 January 2021 to submit.
Unbeknownst to many, taxpayers can file their tax return any time after 6 April each year. Submitting early has many advantages, especially in the current climate.
With the option to defer certain taxes and many taxpayers seeing a change to their income as a result of COVID-19, submitting early this year will help to give you as much notice as possible of what tax will be due on 31 January 2021 so that proper provisions can be made. This is additionally important as taxpayers could be facing a significant bill in early 2021.
Submitting a tax return early does not affect when the money owed needs to be paid as you are only obliged to pay tax liabilities by the normal due dates of 31 January for the balance and the first payment on account and 31 July for the second payment on account, where applicable.
By filing your tax return early and calculating any tax liabilities due you will have the time to start budgeting and managing your cash flow, which can help to prevent the late payment of tax, which could result in HMRC charging you interest and late payment fines.