Many leave their tax return until the last minute. It’s definitely a human trait to want to delay doing something we find boring!
However, if you get your tax return for the 2021/22 tax year completed sooner rather than later, you will have some benefits that could help you through the cost-of-living crisis.
Why Do Tax Return Calculations Early?
Not only are you helping your accountant to spread their workload in a more manageable way, but you’ll also be able to know exactly what your bill is going to be much earlier in the year. This may make it possible to free up some of the money you had set aside to pay the bill if it is lower than you had expected.
For businesses, this could mean having extra cash to invest in business expansion, paying off debts, or hiring an extra full or part-time employee to move the business forwards. For individuals, this money could help offset the current cost-of-living crisis we are in by giving you extra cash to cover rising energy or food bills.
Remember, just because you have had the tax return completed, it does not mean you have to file it with HMRC straight away. If you want your accountant to hold off on this part and file it later in the year – especially if you think there may be any changes necessary to the tax return down the line – then that is not a problem.
Early Tax Return Benefits?
The big benefit to you is that you have the option. It may be that you do not have enough money put aside for your tax bill when you find out what it is. So, the extra time you have built-in before the tax needs to be paid means you have time to get those funds together. It could be the difference between setting aside an extra amount each month to pay the bill while storing money for the next tax year or having to saddle your company with a loan that will cost interest payments too.
It will also ensure your accountant can maximise any tax reliefs you or your business can benefit from. This could include pension payments or offsetting costs against tax that may otherwise be difficult to include if the information is not given to him or her promptly, in the last-minute rush to get the data to the accountant.
Plus, depending on how your accountant works, you could even benefit from having more time to pay your accountant’s bill too.
Overall Early Tax Returns Calculations…
Are done in a leisurely manner, and when that leads to less stress, more time on other important matters and better management of time, that’s never a bad thing!
Need help with your tax returns or any other tax matters? Let us know! Here at Digitaccs, we’re professional accountants that care about your taxing taxes and are always willing to help.
