Pay those self-assessment tax returns early
You’ll be glad you did
How often do we hear clients say: ‘There’s no hurry to fill in my tax returns. I’ve got time till the end of January.’ Well, we’ve got news for you. You could enjoy an unexpected benefit if, instead of leaving it till the last minute, you submit your self-assessment before the end of December. Don’t believe us? Read on …
Do you sometimes find at Christmas, that your mood becomes darkened by the spectre of self-assessment? Although the deadline doesn’t arrive till a month later, its looming sombre presence can still be an unwelcome guest during the Christmas festivities.
Of course, there’s a simple answer – submit the assessment early. But did you know – other than peace of mind, there’s another reason to send your self-assessment in before the end of the calendar year? Cashflow. Now that’s a seasonal gift not to be sniffed at.
Who can benefit from an early return?
Instead of paying your tax as a single lump sum, you’ll be spreading the payment in small amounts, through your adjusted tax code.
For this to work for you, there are a few conditions –
If your tax liability is under £3,000, and you submit your self-assessment return before December 31st, you might be allowed to have this collected through your tax code.
You submit your self-assessment return before December 31st
Your tax liability is less than £3,000
Your tax is already being paid through PAYE, either as an employee or on a pension
Your income through PAYE is enough so that you don’t pay over more than 50% of that income in tax, or pay twice as much tax as you normally do.
Spreading the tax payment can be a massive benefit, especially in January, when ‘Blue Monday’ falls (21st January 2019). That’s the day that those bigger-than-ever Christmas credit card bills land.
Of course, the situation is never helped by the fact that your December wage may have been paid early, leaving you up to six weeks before your January pay hits your account. What a godsend it would be to spread your tax liability over 12 months!
A word of warning –
Remember – if you take this option, then, when you complete next year’s tax return, you’ll need to include the amount of tax that was collected through your tax code.
Otherwise, your tax calculation will probably show a repayment. You might think Christmas 2019 has come early – a dangerous mistake.
We’re self-assessment specialists. For advice on a wide range of tax, payroll, accounting, finance, and trade matters, get in touch.
Call us on 020 3008 7822.
We’d love to hear from you. After all – we’re here to help.
This legal information is not the same as legal advice and you may not rely on our post as a recommendation of any particular legal understanding. Pease, consult an attorney if you’d like to get an advice on your interpretation of this article.