6 benefits to filing your tax return early

The number of people filing their 2022-23 tax return on the first day of the new financial year has hit a new high, with 77,517 self-assessments submitted on 6 April.

That's 11,000 more than last year and double the amount seen in 2018 when 37,000 filed on 6 April, according to figures from HMRC. However, it's still a long way off the 96,519 people who did it on 6 April in 2020 when we were in lockdown. 

The 31 January deadline for 2022-23 self-assessment tax returns may still be eight months away, but being an early bird can save you money. We outline five reasons why you might want to join them.

1. There's time to plan and budget

Getting all your ducks in a row early means you know exactly how much you owe in tax before the final payment deadline of 31 January 2024. Filing now gives you eight months to budget for the bill, but waiting until the last minute could mean you come up short when it's time to pay.

If you want to file a paper return, then the deadline is even earlier - 31 October. 

Remember, if you are employed, you probably have to wait for your P60 before you are able to file. You should receive the form by 31 May.

The whole process can take a couple of weeks, so getting the ball rolling as early as possible will save you last minute stress and possibly a fine if you end up missing the deadline.

Find out more: 

2. You can avoid making mistakes

In November 2022, we surveyed 881 people who were doing self-assessment returns for the 2021-22 tax year. Around a third of those who’ve filed before said the thing they disliked the most was worrying about making a mistake - but errors can actually be rectified after submission.

Nevertheless, it's better to give yourself plenty of time to fill in the form and triple check everything to make sure your tax return is accurate. 

Preparation is key here, so once you're clear about which income streams you need to declare, gather all the relevant documents you need to calculate the tax owed. That include your National Insurance number, UTR number, P60, P45, student loan statement, tenancy agreements, pension statements, invoices and receipts. 

Find out more: 

3. Tweak previous tax returns for extra allowances

Claiming tax reliefs and allowances can knock money off your tax bill. Starting your tax return now means you'll have more time to take advantage of any unclaimed allowances from previous tax years.

You have until 31 January 2024 to tweak your 2021-22 tax return, so if there are any allowances you forgot to take advantage of in the last financial year then this is your last chance to do so. Whether it’s working from home or pension contributions.

Once you’ve filed your 2022-23 return, you can amend it anytime from 72 hours after you’ve filed it until January 31, 2025.

You can claim a refund up to four years after the end of the tax year it relates to, but if you want to amend a tax return for 2020-21 or earlier then you'll need to write to HMRC and make a claim.

4. Get help if you are struggling

If you're finding any part of the process difficult or need to ask a question about self-assessment, then you can call HMRC on 0300 200 3310.

Now is the ideal time to pick up the phone and ask for help. Calling later in the year and just before the deadline in January could mean you're hanging on the phone for a lot longer. 

Self-assessment customers that called HMRC's helpline in January 2023 found they were waiting an average of 27 minutes to get through to someone. While in December 2022, the average waiting time was 28 minutes, The Independent reported.

5. Avoid a fine

filing or 

More than 1.4 million taxpayers were charged interest by HMRC for late payment of tax in the 2020-21 tax year, a freedom of information request by investment platform AJ Bell reveals. That's up from up from 1.2 million before the pandemic. 

HMRC can also impose fines for mistakes, with penalties based on the amount of tax you owe and the kind of error HMRC deems you to have made. For example, whether it was simply a careless mistake or a deliberate attempt to hide something.

Find out more:

6. Get a refund quicker

You can claim a refund up to four years after the end of the tax year it relates to, but it won't be processed until HMRC receives the tax return. If you file now - when the tax office is likely to be quieter - you should get the money back sooner than if you'd waited until a busy time of year such as January.

Filing your 2022-23 tax return? Use the Which? Tax calculator

It provides clear, no-nonsense explanations about the different types of taxable income, plus suggestions for allowances you might have missed. You can even use the tool to file your return directly to HMRC. 

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source https://www.which.co.uk/news/article/6-benefits-to-filing-your-tax-return-early-aU2J49u6i2a2
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