It’s 6 April 2021, the start of a new tax year. Is it too early to start thinking about your 2020/21 self-assessment Tax Return? Of course not!
But, with the 31st January 2022 filing deadline still many months away, why should you worry about it now? Well, here’s seven good reasons why:
- If you are due a repayment then you will receive this shortly after you submit your Return. No need to wait until next February, get the cash now!
- If you are due to make a payment on account of your 2020/21 liability by 31 July 2021 then you can identify if the predicted payment is too high and reduce it.
- If you pay tax through PAYE you may be able to have the 2020/21 liability due by 31 January 2022 collected through your 2022/23 PAYE code instead, so you can keep your cash for longer. This option disappears later in the year.
- If you submit your Tax Return early this doesn’t mean that you have to pay your tax any earlier. The payment will still be due by 31 January 2022 but now you will have plenty of notice of the amount due and time to plan for how the payment will be funded. No nasty surprises further down the line!
- If you submit your Tax Return early this doesn’t mean that HMRC have longer to open an enquiry into your Return. HMRC’s enquiry window is 12 months from the date of submission and not 12 months from the 31 January 2022 deadline.
- If you are house-hunting and applying for a mortgage then you will have up-to-date financial information to hand. Later in the year you may find that your 2019/20 Tax Return is no longer accepted by mortgage providers as proof of income.
- You will make your accountant very happy, as well as putting yourself right at the top of their to-do list while things are still (relatively) quiet!
If you don’t love tax and preparing Tax Returns as much as I do then get in touch. I’m happy to help.
