Make filing your returns early less taxing
A surprising turnaround is taking place in the world of tax – more people than ever before are getting their tax returns in early.
And by early we mean really early.
Data released by HM Revenue and Customs (HMRC) has revealed that 63,500 people filed their 2020 to 2021 self-assessment tax return online on the first day possible, 6 April 2021.
And by 17 May, using the latest statistics available, that figure had risen to an incredible 934,501. This should be set against the deadline for self-assessment returns of 31 January 2022, which is a long way in the distant future.
This is a far cry from what we often see – a frantic dash at the last minute to make sure everything is in order before finally submitting returns at the eleventh hour.
At HWB our tax team have by far their busiest month in January as they guide clients through the returns process.
Dealing with almost 1,300 tax returns, many on behalf of self-employed business owners, people with property portfolios and company directors, the team noted that men were most likely to procrastinate and leave things to the last moment.
It must be said though that the vast majority of the returns we deal with are returned well within the usual 31 January deadline, which was extended to the end of February this year because of the pandemic.
But what has brought about this growing trend for ultra-early returns for the 12 million people required by law to file tax returns?
Apart from the obvious of avoiding any last-minute rush to meet the deadline, we suspect that it is a growing realisation, possibly brought on by Covid-19, that it is best to have one’s affairs in order or wanting to reduce the July payment on account for cash flow purposes.
There is also no real need to delay if the figures are to hand (and they should be) so a pattern could well emerge of filing early, as soon as one tax year ends and the new one starts.
There is the added bonus that if one is due a tax refund, the money will be paid within a few days rather than next year (if you have a bill it won’t need paying until 31 January 2022 either). And early filing is also the way to avoid falling into the trap of penalties for late returns.
HMRC says that in the last five tax years, the number of customers choosing to file on the first day of the new tax year has almost trebled from 22,885 in 2017 to 63,521 in 2021.
The department is urging others to also file their tax returns early and has published an online guide to help customers file early – how to do it, what the benefits are, and what they need to get started.
This guide includes helpful information on how to get help with your tax return and what to do when declaring furlough payments, self-employed Income support scheme grants or other Covid-19 support measures
It also looks at what information you need before you can start your tax return, help with paying your bill and what to do if you have paid too much tax.
HMRC is warning that people should be aware of copycat HMRC websites and phishing scams. They should go to on GOV.UK to get the correct link for their filing tax returns online securely and free of charge.
There is also a need to be vigilant if someone calls, emails or texts claiming to be from HMRC, asking for bank or other personal details, threatening arrest or demanding a money transfer. It might be a scam.
The HMRC guide is an excellent starting point for filing tax returns early with a plethora of general information, but you may then wish to move to a more specific, bespoke service for your own needs.
Thus, if you are now thinking about 31 January 2022, take a look at a short HWB video here for more information on how our team can help to make your returns less taxing.
We think it is best to be organised and well-prepared in advance and we are here to help anyone concerned about how to register and accurately submit a tax return.
At HWB we have been in this business a long time, we are good at what we do and we are completely on top of the constant changes in rules and regulations.
Our aim is to maximise your claims for tax relief and ensure you don’t miss out on any allowances that you are entitled to – exactly the service you would expect from us.
Our advice and assistance will help you structure your tax affairs efficiently, give you peace of mind and make sure you don’t miss deadlines – and we are more than happy to complete the whole process for you.
Read the full HMRC guide here: https://www.gov.uk/government/publications/file-your-self-assessment-tax-return-early/file-your-tax-return-early