We know how tempting it can be – December is always chaotically busy in the lead-up to Christmas, there are just a few days until New Year celebrations, and then, of course, it’s back to business as usual and the annual struggle to get back on top of all the tasks you left undealt with before the holidays.
But the self-assessment deadline is always looming, and if you plan on leaving it until after Christmas, you might want to think again…
Penalties for late returns
Having to pay extra for filing something late is a real kick in the teeth, especially when the stakes are high and those penalties could be avoided. File your return late and you could be stung by;
- An instant penalty of £100, even if you have nothing to pay or if the tax due is paid on time after 3 months.
- An additional penalty of £10 per day up to a maximum of £900.
- A further penalty of either 5% of the tax due or £300 – depending on which is greater – if your tax return is more than 6 months late.
- A further penalty once again of either 5% of tax due or £300 if your return is more than 12 months late.
- Additional penalties for paying tax owed late, which includes 5% of any tax unpaid at 30 days, 6 months and 12 months.
Benefits of submitting early
It’s not all bad news though – getting your tax return completed and submitted in plenty of time doesn’t just protect you from fines, it can actually bring its own set of benefits both to you and your business;
- Submitting early doesn’t mean you have to pay early, unless of course you choose to. You just need to ensure payments are received by the usual due dates.
- You could get refunds owed sooner. HMRC won’t wait until pay dates to issue your refund, so get your tax return in early and you could get your money back early too.
- Forecasting ahead is so much easier when you know how much you have to pay. Submitting your return early means you have longer to save while knowing exactly how much you owe…and that makes it easier to manage your cash flow.
- You can take advantage of tax saving opportunities. Depending on how your business has done in the financial year, there may be different tax schemes and incentives open to you – and filing early means being able to consider all options to take advantage where possible.
- You’re less likely to make mistakes if you complete your tax return without any pressure or rush. It also allows more time for documents to be processed.
- You can pay back tax owed through your PAYE code rather than as a lump sum, if you owe less than £3000 tax and you get your return in by the end of December.
- You won’t have to spend hours on hold to HMRC. As the deadline approaches, so too will the amount of people completing their own returns. If you need to contact HMRC for any reason when submitting your tax return close to the deadline, expect to be put on hold – and remember, that could be the difference between incurring penalties and getting your return in on time.
There’s no denying that submitting your tax return can prove a real headache, but you don’t have to take care of all this yourself. If you’d rather take the pressure off and spend the beginning of your year getting on with business rather than filing returns, talk to us at Chippendale and Clark. We’ll collate, complete and submit your tax return for you – accurately, efficiently and on time – so you don’t have to worry about a thing.
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