Benefits of Filing Your Tax Return Early

Did you know that filing your self-assessment tax return early can save you time, money, and stress? Gone are the days of scrambling at the last minute to gather documents and calculate your tax bill.

In this blog post, we’ll explore the numerous benefits of filing your tax return early, from quicker tax refunds to enhanced tax planning opportunities. Get ready to embrace the advantages of early tax return submission and revolutionise your financial life!

Short Summary

• Submitting your self-assessment tax return early can provide various benefits, such as faster refunds, improved cash flow management and better access to loans.
• Early submission can significantly reduce the filing process’s stress and allow more time to budget and identify exemptions/reliefs.
• Filing taxes early provides enhanced accuracy and opportunity for corrections before the deadline while avoiding HMRC’s peak season.

The Perks of Early Tax Return Submission

Submitting your return early can unlock benefits beyond avoiding penalties for late filing. Early submission of your self-assessment tax return can lead to faster tax refunds, reduced stress, improved cash flow management, and even better access to loans and mortgages. Don’t wait until the last minute to file your tax return; instead, seize the opportunity to improve your financial situation by submitting your self-assessment tax return early.

Filing your self-assessment tax return early helps you avoid late filing penalties and ensures that you receive any overpaid tax refund promptly. Additionally, early submission allows for more effective self-assessment tax bill management and increases tax planning opportunities.

In the following sections, we’ll delve into the numerous advantages of early return submission.

Quicker Tax Refunds

One of the primary benefits of filing early is the potential for quicker tax refunds. By filing your assessment tax return early, your return is processed sooner, which means you’ll receive any overpaid tax refund faster than if you waited until the deadline. This improved cash flow can help you manage your tax owed more effectively and alleviate financial stress.

For self-employed individuals, a faster tax refund can be especially beneficial. A P60, which outlines your earnings and tax paid for a given tax year, may not always be available or sufficient to prove your income. By filing your tax return earlier, you can provide evidence of your income more quickly, helping you easily secure loans, mortgages, or other financial products.

Reduced Stress

Another notable advantage of filing early is the reduced stress and anxiety associated with last-minute filing. Completing your self-assessment tax return well before the deadline, you can avoid the panic and pressure often accompanying the rush to file. Incorporating assessment early into your financial planning can help you better manage your tax obligations.

Moreover, early submission allows you to tackle any unexpected issues or complications that may arise during the filing process without the added stress of an impending deadline. This means you can take the time to ensure the accuracy of your return and avoid potential penalties for errors or omissions.

Improved Cash Flow Management

Filing your tax return early ensures you receive your tax refund sooner and contributes to better cash flow management. By having a comprehensive view of your financial situation, you can make more informed decisions about your cash flow and allocate funds accordingly.

In the next subsections, we’ll discuss how early tax return filing provides more time to budget and helps avoid late payment penalties.

More Time to Budget

Effective budgeting requires careful planning and diligent tracking of income and expenses. By filing your tax return early, you gain additional time to plan for your self-assessment tax bill and adjust your finances. This extra time allows you to make any necessary adjustments to your budget and ensure you have the funds available to cover your tax bill.

Furthermore, filing early enables you to identify potential discrepancies or errors in your return, providing ample time to correct them before the deadline. This proactive approach to budgeting can help you avoid unexpected financial setbacks and maintain better control over your finances.

Avoid Late Payment Penalties

Late payment penalties and fines can be an unwelcome surprise for those who miss the deadline for filing their tax return. Filing early can avoid these penalties and ensure you have the funds to cover your tax bill.

Additionally, early filing allows you to set up a budget payment plan or make arrangements with HMRC if you cannot pay your tax bill in full by the deadline. This proactive approach can help you avoid late payment penalties and keep your finances on track.

Enhanced Tax Planning Opportunities

Filing your tax return early offers many tax planning opportunities, allowing you to take full advantage of exemptions, reliefs, and tax-saving strategies. By submitting your tax return ahead of schedule, you can identify potential savings and adjust your finances for the upcoming tax year.

In the following subsections, we’ll discuss the benefits of identifying exemptions and reliefs and implementing tax-saving strategies.

Identifying Exemptions and Reliefs

Tax exemptions and reliefs are government policies designed to reduce tax payments for eligible taxpayers. By filing your tax return early, you have ample time to identify any exemptions and reliefs for which you may be eligible, potentially reducing your tax bill.

Some common exemptions and reliefs include deductions, credits, exclusions, and tax-free allowances. By taking the time to research and understand these policies, you can maximise your tax savings and minimise your tax liability, putting more money in your pocket.

Implementing Tax-Saving Strategies

In addition to identifying exemptions and reliefs, early tax return filing provides the opportunity to implement tax-saving strategies for the upcoming tax year. These strategies may include maximising deductions, contributing to a pension, utilising tax-efficient funds, considering charitable donations, investing in an ISA and taking advantage of tax-free allowances.

By planning and implementing these strategies, you can optimise your tax savings and ensure you’re making the most of your hard-earned money.

Minimising Errors and Mistakes

Submitting your tax return early can help minimise errors and mistakes that could result in penalties or additional scrutiny from HMRC. The early filing allows for increased accuracy and ample time for corrections before the deadline.

In the following subsections, we’ll discuss the benefits of increased accuracy and having time for corrections.

Increased Accuracy

Filing your self-assessment tax return early increases the accuracy of your return, reducing the risk of penalties or fines. By taking the time to carefully review your tax return and ensure all information is accurate, you can avoid potential fines and scrutiny from HMRC.

In addition, early filing affords you the time to gather any necessary documentation and consult with a tax advisor if needed. This proactive approach can help ensure your tax return is accurate and complete, minimising the risk of errors and mistakes.

Time for Corrections

One of the key benefits of early filing is the time it provides for making corrections before the deadline. If you discover an error or omission in your tax return, early filing allows you to make the necessary corrections without the pressure of an impending deadline.

By taking advantage of the extra time provided by early filing, you can ensure that your tax return is accurate and complete, reducing the risk of errors and mistakes.

Better Access to Loans and Mortgages

Early self-assessment tax return filing can lead to better access to loans and mortgages by providing proof of income more quickly and efficiently. This can be especially beneficial for self-employed individuals who may not have a traditional salary or wage as proof of income.

In the following subsections, we’ll discuss the benefits of early filing for self-employed individuals and how it can expedite the loan or mortgage application process.

Proof of Income for Self-Employed

For self-employed individuals, proving income can be challenging when applying for loans, mortgages, tax credits or other financial products. By filing your self-assessment tax return early, you can provide proof of income faster and more efficiently than waiting until the deadline. Some financial products may require an accountant to verify the figures.

In addition to tax returns, self-employed individuals can provide bank statements, profit and loss statements, and an accountant’s letter as proof of income. Having this documentation readily available lets you improve your chances of securing the financing you need.

Faster Application Process

Filing your tax return early can expedite the loan or mortgage application process for self-employed individuals by providing the necessary proof of income. This can enable lenders to make an informed decision about your loan or mortgage application, potentially improving your chances of obtaining the financing you need.

Additionally, completing your tax return early can help streamline the application process by ensuring that all required documentation is available and up to date. This can save time and reduce the likelihood of delays in obtaining financing.

Avoiding HMRC’s Peak Season

Filing your tax return early can help avoid HMRC’s peak season, typically around the self-assessment deadline. During this busy period, response times from HMRC can be slower, and dealing with HMRC can be a more stressful experience.

In the following subsections, we’ll discuss the benefits of faster response times and a less stressful experience when dealing with HMRC.

Faster Response Times

By filing your self-assessment return early, you can benefit from faster response times from HMRC, reducing the time you spend waiting for answers to your queries. This can make the tax filing process much more efficient and less frustrating.

To further expedite response times, try contacting HMRC during less busy periods, such as early morning or early lunchtime. Being proactive and avoiding peak periods can ensure a smoother and less stressful experience when dealing with HMRC.

In 2023 HMRC closed the self-assessment phone line for three months; if you have an issue with your self-assessment tax, you might not be able to file it as early as you want.

Less Stressful Experience

Filing your self-assessment tax returns early can lead to a less stressful experience when dealing with HMRC. By avoiding HMRC’s peak season, you can benefit from quicker response times and potentially more accommodating staff, making the overall process less arduous and more manageable.

Early filing allows you to tackle any unexpected issues or complications that may arise during the filing process without the added stress of an impending deadline. This means you can take the time to ensure the accuracy of your return and avoid potential penalties for errors or omissions.

Summary

In conclusion, submitting your self-assessment tax return early offers numerous benefits, including quicker tax refunds, reduced stress, improved cash flow management, enhanced tax planning opportunities, minimised errors and mistakes, better access to loans and mortgages, and avoiding HMRC’s peak season. By taking advantage of these benefits, you can improve your financial situation and enjoy a more efficient and stress-free tax filing experience. Don’t wait until the last minute; start reaping the rewards of early tax return submission now!

Frequently Asked Questions

Can I submit my tax return early?

You can submit your self-assessment tax return early; payment on account is due on 31 January and the next on 31 July. By completing an early return at the start of the tax year in April, you’ll better understand how much you owe for the year and can plan for future payments.

If you’ve overpaid, you should receive your refund sooner.

When can I file my 2023 self-assessment tax return UK?

You can file your 2023 tax return UK on 6th April 2023 once the tax year has ended.

Payment, registration and submission deadlines fall on 31st July, 5th October, 31st October and 31st January.

Is it better to file a tax return early or late?

It is better to file self-assessment tax returns as early as possible in the new tax year since this will allow you to save up for your tax bill.

By filing early, you can take advantage of deductions and credits that may not be available later in the year. You can also avoid the rush of last-minute filers and potential errors when filing quickly. Additionally, additional information is provided below.

How long does it take for HMRC tax refund to go into the bank?

It typically takes HMRC from 2 to 12 weeks to process your tax refund, followed by several days to 3-4 weeks before it enters your bank account.

This means you should expect to wait at least 12 weeks before receiving your refund. However, it could take longer, depending on the processing time.

How can early tax return filing improve my chances of obtaining a loan or mortgage?

Filing your self-assessment tax return early can improve your chances of obtaining a loan or mortgage by providing proof of income more quickly, especially if you are self-employed.