Why complete your tax return in the Spring?
Between April – July 2023 LKA were able to assist 235 people finalise their 2023.24 tax position, however a majority still leave this process to the last minute despite the overwhelming reasons to get sorted sooner. Here our Tax Director, Robyn Milstead, outlines the advantages of being among the early birds:
All the information is available
We kick off our tax return processes as soon as the tax year is finished because in many cases the information needed will be available in some shape or form. Even when information is not fully available (for example P60s are usually sent out in May, P11ds in July and managed portfolio summaries may not be available until June) letting us work on what IS available can help expediate the process and make sure we can pick up on any potential snagging points sooner rather than later.
Quicker reclaim of any tax repayments
If you’re due a repayment this can be reclaimed as soon as the tax return is submitted and then processed by HMRC. You’re most likely to be due a repayment where you have ceased working within the tax year or where you have paid payments on account in advance but your income has dropped. Why wait?!
More notice of any tax payments due
One of the worst aspects of completing a return in December/January is that tax bills are not only often perceived as a shock but are also due for payment within a matter of weeks. Cut that stress out and complete your return ASAP and you’ll have months to plan for a bill and much more time to approach HMRC to negotiate a payment arrangement if needed. Submitting your return earlier does not bring your payment date forward it just gives you more time before you need to pay it.
Less time for HMRC to enquire into your return
HMRC have 12 months from the submission date to open an enquiry into your return (i.e. to ask you questions about the figures within) so submitting your return early starts that clock ticking sooner. Submitting sooner also reduces the risk of filing late which then extends the enquiry window past the normal 12 months.
Up to date documents for mortgages and loans
Mortgage companies and advisers often require a copy of your latest Tax Return along with an ‘HMRC overview’ for the year to calculate your borrowing capacity. The HMRC overview is only available once your return has been submitted and processed by HMRC so keeping up to date with your returns sooner rather than later could be the difference between getting that mortgage or experiencing delays.
More possibility to identify changes that can save you tax in the current year
When we have a good picture of your latest tax year it can help us look for any opportunities to bring about more tax efficiency in the current tax year – and in Spring we have much more of the tax year left to make more effective changes.
Better access to HMRC
As you may be aware HMRC customer service levels are not ideal at the best of times, but this gets generally worse as we approach 31 January. Often waiting times on their phone lines exceed 1hour in January, with regular stories of taxpayers being cut off mid call. Where we try and shelter you from any HMRC contact there are some circumstances where it is necessary for you to contact HMRC (for example updating your address where we are not yet your registered agents or negotiating a payment plan). At these times you’ll thank yourself that you’re calling at a time where they may actually pick up the phone.
Easier access to tax advisers
I make no secret of the fact that my team and I are human beings and that the reality of sending us your tax return information in December and January will mean you are competing for time and attention with comparatively more people with less time to spare. While we of course work very hard to maintain a high standard at all times you are likely to also find that our turnaround times are much more favorable in Spring and our meeting time availability is much more open too.
Smug factor
When HMRC start their TV and radio campaigns encouraging taxpayers to complete their returns you can ignore them… and who doesn’t want to be in a position to ignore HMRC!?
Action: All our self assessment clients will receive an email from the team in April to start the 2024.25 process. Please take time to read and get in touch!
