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Why it pays to get your tax return in early

Every year, around 15% of people end up submitting their tax return late, miss the 31 January deadline and are forced to face the harsh penalties.  This is just one of many good reasons why you can benefit from sending your tax return information to PK Group well ahead of time.

If you are self-employed or a high net worth individual, it is advisable to send the requisite paperwork to PK Group’s advisers as soon as you can – and ideally before July.  Here are just a few reasons why:

• Faster refunds. If you’ve overpaid your taxes and are requesting a refund, it makes a lot of sense to file early. You’ll get your refund sooner and the HMRC probably won’t be as busy during the spring/summer months, meaning your tax return is likely to be processed more quickly.

• It’s one less thing to worry about. With many taxpayers leaving it until the last minute (i.e. December), this is a time when people generally have a lot of other commitments, which can leave the tax return slipping down the priority list.

• Avoid the possibility of being late and facing penalties. With current HMRC rules (2010/11), if you are just one day late submitting, you face a fine of £100.  After 3 months, this is increased by £10 for every day you are late.

• You can avoid outstanding liability payments.  Should you have an outstanding liability of more than 20% of the total due, you will be asked to make two payments on account in the following year – on 31^st January and 31^st July (unless this amount is less than £1,000).  However, if your tax return is prepared in advance of 31^st July, you can substantially reduce or even avoid this payment, if you believe you are set to be overcharged.  This can help small businesses in particular, by freeing up cashflow.

If you would like to discuss the benefits of an early tax return submission, please contact one of PK Group’s tax advisors today.