Why should you complete your Self-Assessment Tax Return before the January rush?

January is always a busy month for HMRC as people rush to file their self-assessment tax returns before the 31^st January deadline. It is advisable to avoid this busy period and file your tax return as soon as possible.

Christmas is a popular time of year to file self-assessments

Surprisingly, Christmas is a popular time of year for individuals to file their self-assessment tax returns. While most people were rising early to open presents and start the festive celebrations, 248 people had finished and sent their tax return by 8 am on Christmas day last year.

HMRC reported that a staggering 22,035 taxpayers filed on the 24^th December 2019 and a further 3,003 taxpayers filed on the 25^th December 2019. Boxing Day also saw a significant number of people filing their self-assessments in between the festivities with 9,254 filing on the 26^th December 2019.

Beat the January rush and allow yourself time to relax

While Christmas may seem like a busy period, January is when the bulk of taxpayer’s returns are filed. Filing early will mean you avoid the mid-January dread felt by many contractors who have put off completing their return until the last minute. Why not beat the January rush and give yourself a well-deserved break over Christmas? Appoint our specialist Personal Tax team to complete your tax return and save yourself hours of stress and confusion.

Avoid the £100 penalty for filing late

The deadline for filing your 2019/20 self-assessment tax return is midnight on the 31^st January 2021. Even if you are only a couple of minutes late submitting your tax return, you will incur a £100 fine. If you haven’t filed by the 1^st May, a daily penalty of £10 will start to accumulate, up to a maximum of £900 (90 days). HMRC will also issue you with a £300 fine, or 5% of the tax you owe (whichever is greater) if your return is six months late, and this will double if you still haven’t filed within a year.

Know your tax liability

The sooner you file your tax return, the sooner you will be aware of any tax liability and can plan for upcoming tax payments. If you are due a tax repayment, then submitting your return early will result in you receiving your refund sooner. If you wait until January, refunds take a lot longer to process as it is one of the busiest periods for HMRC.

Important changes to consider for the January 2021 deadline

This year the government introduced support measures to support businesses and individuals who had been affected by the Coronavirus pandemic. It is essential that you have an understanding of the deadlines coming up and what you need to do ahead of the January 2021 deadline.

As part of the COVID-19 support measures, anyone who was due to submit a second payment on account for the 2019/20 tax year (due 31^st July 2020) could defer this payment until the 31^st January 2021. If you deferred this payment, you would need to pay this along with the balancing payment on the 31^st January 2021. Alongside this, you will also be required to make your first payment on account for the 2020/21 tax year.

If you have set up a Time to Pay arrangement with HMRC, then you can pay the July 2020 payment on account and the balancing payment from 2019/20 in 12 monthly instalments before the 31^st January 2022. Please remember you will still need to pay your first payment on account for the 2020/21 tax year and submit a tax return before the 31^st January 2021.

Enlist the help of our expert Personal Tax team

Our expert Personal Tax team has completed over 20,000 Tax returns since 1998. They will take care of everything for you from completing the forms and calculating your liability or refund, to submitting it to HMRC on your behalf – leaving you with more time to unwind at Christmas!

If you are interested in our tax return service, please give our team a call on 01707 871622 or complete the short form on our website to get started.