5 reasons why it is ideal to file your self-assessment in the summer
Updated: Feb 12
Most female-led sole, micro and small businesses are under the impression that self-assessment tax returns should be filed in Autumn or in the run-up to 31st January, we give you five reasons to consider filing in Summer.
1. Avoid the relaxed Christmas then panicked January
31st January is the deadline, NOT a target. Every year, bookkeepers receive January panicked telephone calls from business owners who thought they could file their tax returns but waited until January to get started. With January's arrival, they realise a combination of things:
There is paperwork missing and they cannot get it before the 31st January deadline;
Thought they could file a paper return but realised paper returns have a different deadline, which has already passed;
They don't know how to use the software needed to file their return; and/or
They have no idea what they are doing.
The panicked stress could have been avoided if they had completed and filed their return in the summer. It would have given them the luxury of time, plus January is a cold, grey, bucket of suck, do you want to be stress-panicking about your tax return?
2. But I might need to make a change!
Many self-filers wait until January because they are scared they will remember something that needs to be included after their summer filing. HMRC allows for changes to be made (as long as your wait 3 days after the last filing). It is much better to file in the summer and make a change later than it is to panic file.
"The secret to getting things done is to act." – Dante Alighieri
3. What is payments on account?!
First-time filers who wait until January to file usually come unstuck here as they don't know about 'payments on account.'
In January, most established businesses make two payments to HMRC. The first is to pay the income tax for their most recently filed return.
The second, where newbies usually become unstuck, is a prepayment (amount calculated based on the most recently filed return) towards the next tax year. If you file in the summer, you will have at least five months to budget for the two payments due on 31st January (note: a second payment on account will be due on 31st July, following the first payment in January).
4. HMRC adjustments
After you file your return, HMRC will review it and may make adjustments. Not all adjustments are bad. If, for example, you overpaid the amount of tax due via payments on account, HMRC will credit your payment on account due in January.
Generally, unless you have earned a lot less in profit, it will be no more than £10, but as the old saying goes 'pennies make pounds.'
You will only know about any interest credit owed to you in time to have it credited if you file early.
5. You got all the docs you need
By summer, all financial institutions and employers will have sent documentation of your prior tax year earnings. This should complete all the paperwork you need to file your return. As they all usually arrive around the same time, they will easily be at hand to file in the summer.
Ready to file in the summer?
Filing your tax return in the summer has nothing but benefits. Are you ready to file in the summer? We have a DIY Self-Assessment Prep Checklist to help you on your way.