How to avoid self-assessment stress this Christmas

Dec 9, 2022 | HMRC, Tax

Christmas is fast approaching, and whilst it’s vital you do get some downtime, see your friends, family and loved ones, there’s a deadline approaching which isn’t worth forgetting about.

The self-assessment deadline of the 31st of January is a vital milestone in your calendar for next year and will be here before you know it.

In our experience as accountants, it’s not worth waiting until January to get it all done – get ahead now, and save yourself the stress.


Save yourself the stress

In 2022 more than 630,000 people waited until the last minute to submit their annual returns to HMRC.

Nearly 21,000 of them filed in the final hour – just avoiding the late-filing penalties by the skin of their teeth.

You’ve got about a month and a half to avoid such last-minute madness – there is little to be said for being so against the clock for your stress levels.

Delaying til after Christmas is setting yourself up for problems – January is normally filled up with planning for the year ahead, so don’t waste this time on your return.


Save money

When you spend a whole year grafting and working hard, you don’t want to see some of your cash going to HMRC in late fees. The earlier you settle up your outstanding tax bill, the less interest you’ll incur.

And the sooner you file your return, the sooner you’ll receive any potential tax refund you could be due. It will be quieter too, so no need to worry about the HMRC site crashing.

Obviously, you won’t save any money by doing this, but you won’t be paying any late penalties either.

If you miss the deadline, you’ll automatically be handed a £100 fine by HMRC. Fail to pay and file your tax return for even longer, and you’ll pay interest on the outstanding tax balance and additional daily penalties up to a maximum of £900.


Cashflow management

By submitting your return early, you’ll get any refunds due if you’ve overpaid. This will give you some extra cash, and allow you to understand your cashflow in the new year better.

You’ll be able to invest this money into your business, purchase new equipment or even pay any outstanding debts. It’s also a good time to look at creating an emergency or ‘rainy day’ fund in case of extenuating circumstances. You never can predict what’s going to happen next in business.


What if I’ve sold something?

If you have sold a property (which isn’t your primary home) or higher-value assets, you’re likely to pay capital gains tax. In this case, you’ll need to include this sale in your self-assessment tax return, even if you have reported it under the 60-day deadline.


Talk to us

We want you to feel confident and ready to tackle the new year head-on – so getting ahead on your self-assessment return is a really good start.

If you have any questions or feel like you need clarification, get in touch with us today.

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