Self Assessment Tax Return: Important Dates and Advantage of Filing Your Self Assessment Early
The Covid-19 pandemic has impacted businesses and personal lives on different levels, and most of us had to reinvent our way of running our lives and making our business profitable (as much as possible). So, if you are either doing business as a Sole Trader or you are part of a Partnership or Limited Liability Partnership (LLP), you have to fill out your self assessment tax return for the tax year ended 5th April 2021, even if you have been closed or had limited trading because of the pandemic, despite all this, you will still need to file a Self Assessment Tax Return.
It’s only June 2021 and 31 January 2022 might seem like a long way away, but there are advantages to filing your Self Assessment Tax Return early.
Advantages of Filing Your Self Assessment Early:
1. Cash Flow
If your tax return shows that you are due a tax refund from the taxman, this will be paid to you early and can help your business with much needed cash flow. Things are hard as they are, so every penny will go a long way in helping keep your business going.
2. Time to Plan & Time to Save for your Tax Bill
Because you are not rushing through your tax return, you will have enough time to record all your expenses correctly, therefore avoiding costly mistakes. This will ensure you pay only the correct amount of tax, nothing more. And if you don't have the funds to pay for your tax bill, you will at least have the time to save up for it
3. Avoid Penalties and Fines
By submitting a correct self assessment tax return on time, you are avoiding the risk of late filing penalties and fines. That’s gotta be a good thing right?
- A £100 instant fine if you miss the January 31st deadline
- £10-per-day fines (for up to 90 days) if you haven’t filed by 30th April
- A £300 fine (or 5% of the tax you owe – whichever is greater) if you still haven’t filed after another 90 days
- Another £300 fine (or 5% of the tax you owe – whichever is greater) if you still haven’t filed within a year
- Additional penalties – including up to 100% of owed tax – if HMRC believes you are intentionally delaying your filing.
In addition, you will have peace of mind knowing that all your records are in good order and you have saved on tax.
There were some changes to the rules and fines in January 2021 as a result of the Coronavirus pandemic, but they’re unlikely to be repeated next January.
4. Have a Stress Free Festive Season
By filing your return early, you will enjoy the festive season knowing that, come January when everyone is panicking and rushing around to file their tax return, yours is filed and you don't need to do a thing.
Good to Know:
With the way things are with the pandemic, no one knows what the future will be, and so, just in case there is more support from the Government - it is a good idea to ensure that your self assessment tax returns are filed on time.
Self Assessment Deadlines to be Aware of:
The last tax year started on 6 April 2020 and ended on 5 April 2021.
- 5 October 2021 - Register for Self Assessment if you are Self Employed or a Sole Trader or in a Partnership.
- 31 October 2021 - File Paper Self Assessment Tax Returns.
- 31 January 2022 - File Online Self Assessment Tax Returns.
- 31 January 2022 - Pay the Tax you owe.
Don’t Fall for a Scam
A lot of fraudsters try their luck at this time of year when self assessment tax deadlines come around. You need to be careful and not fall for tricks that will result in you disclosing important personal data.
You should question any communication from an organisation that wants your details instead of just handing them straight over.
If HMRC wants to contact you directly, they would send a letter in the post. Be careful and never give bank details if you receive unsolicited communication about tax.
Never open an email attachment from HMRC; they will never ask you to do this. You should also note that fraudsters often try to pressure people to hand over details. They might do this by threatening you with legal action saying that you owe money. It is important that you don’t succumb to pressure and hand over sensitive information.
From My Business to Your Business: Work with an Accountant!
Accountants can help you with your self assessment as well as other matters. This way, you can make sure you are doing everything right. There is no reason to feel stressed when you have an expert on your side. Get in touch with us today to work with an expert Accountant Hemel Hempstead clients trust.
You're very welcome to get in touch with Grace Certified Accountants if you have any questions.
I hope this information helps your business run more smoothly through these difficult times.
Director & Managing Partner
Grace Certified Accountants