Why you should do your Tax Return early...

By the team at Haines Watts Swindon..

Another tax year has been and gone, and the need to submit your tax return is as inevitable as the tide going in and out, just not as frequent. Last year’s tax return is not due until 31 January 2022, so why should you do it early?

The vast majority leave this until the last minute, or at least the last month or so, but there are lots of good reasons to do your tax return before then. In fact, for many, now is the ideal time to do it.

Cashflow Planning

There are benefits in knowing your tax liability for the year personally and in business as soon as reasonably possible. 

This gives you more time to make sure you have the funds available for January 2022 – you still have to pay the same amount but you have had time to get the funds in place. 

This is even more important if you need to put finance arrangements in place, give yourself time and space to find the best deal, rather than panicking in the days before the deadline.

As we come out of the pandemic a number of businesses may be in this position due to the extraordinary pressures the economy and therefore trade, has been under. 

For those more methodical in their tax savings, you may put money aside each month to cover your tax bill. 

Knowing as early as possible what your tax payments will be, allows you more flexibility in your plans. 

If you submit your 2021 tax return now, you will know the payments due in January 2022 and July 2022 giving you the opportunity to re-organise your finances and possibly reduce your monthly savings, or take a lump sum out for a much needed holiday or for another purpose.

Real time data

Of course, all of the above is about looking back at what your income has been in the past, and what your tax liability on that income is. 

However, you can take the above one step further, and by maintaining details of your non-PAYE income electronically on a regular basis you can forecast what your tax liabilities will be in real time. 

In fact, in the next few years, certain individuals e.g. landlords, will be required to file real-time returns under the government’s Making Tax Digital regime – now is a good time to get into good practices.

Although making tax digital has been delayed further it will still come about and being prepared will make that transition far smoother. 

If you are concerned about tax planning in your business - we are happy to help. We have offices in Swindon's Old Town and can be contacted here - https://www.hwca.com/accountants-swindon/

*the image shows Martin Gurney who is the tax partner at Haines Watts Swindon. Haines Watts is one of the largest accountancy brands in the UK offering services through local offices so their experts can offer a local service backed by national strength and expertise.