The deadline to file your self-assessment online tax return is 31 January 2022. It’s your return for the tax year running 6 April 2020 to 5 April 2021.
January might seem a long way off, but now is the time to get your house in order if you haven’t already done so. By doing it soon, you will avoid any last-minute panic and you could even save on tax.
Why early-filing might save you tax
Many businesses had an unusual year in 2020/2021, with vastly differing income than pre-pandemic years.
As you will know from previous tax bills, there are two dates on which to make payments on account. There’s a payment due on 31 January, and another due on 31 July. Each one is an advance payment towards your bill.
These payments on account are based on estimates from your previous income and the tax you paid on those earnings.
But your actual figures may differ significantly from those estimates, following the impact of COVID-19. Reporting figures from a less-profitable year now could adjust the amount you owe in payments on account.
In a similar vein, you could be on track for a refund if you have been overpaying tax. The sooner you deal with your tax return, the sooner you will receive a tax rebate.
But even if you don’t think your tax estimates need adjustment, there is still benefit in doing your tax return now.
With sufficient time to analyse your accounts, we can make sure you are using all the tax allowances and reliefs available to you. You could be missing a trick to reduce your tax bill legitimately.
Depending on your accounting system, it can take time to gather all the information you need for your tax return.
This is particularly relevant this time round, where your tax return may be a little more complicated than previous years.
This year, you might have to account for new income streams that did not exist before 2020, such as the COVID-19 support schemes.
If you have made use of any of the Government’s schemes to help businesses during COVID-19, you will have to declare what you received and pay tax on that amount. This includes:
- The self-employed income support scheme
- The furlough scheme
- Other COVID-19 grants and support payments, such as self-isolation payments, local authority grants, and those for the eat-out-to-help-out scheme.
Taking all this into account might make your tax return more technical than in previous years.
As with any intricate or complex task, it is much easier to do it well when you are in a calm space without the pressure of a fast approaching deadline.
Give yourself time to make sure you have captured everything accurately.
Focus on your long-term strategy
The sooner you submit your tax return, the sooner you’ll find out what you owe in tax. You can plan the next year’s strategy for your business without any surprises.
Having submitted your tax return, you might discover that you have a bill that is beyond your current means to pay.
If that is the case, do not panic. We can help you with repayment plans, or we can discuss ways in which your business can raise funds and/or access finance to help you out.
You can only make a strategic plan when you have got all the facts, so do not leave it until the night before and file your return in a panic. Be smart and organised and let us know if you would like a hand.
How we can help
Get in touch today for help with your self-assessment online tax return. We will take the stress out of the process and make sure you file an accurate assessment, on time, with all your allowable tax reductions. We’ll save you time, money and sleepless nights, so you can focus on building your business.
Talk to us about your tax return.