As a small business owner, filing your annual self-assessment tax return is probably not your idea of a good time. However, it’s a necessary task that needs to be done each year. In this blog post, we’ll explore the best time to complete and file your tax return to make the process as smooth and stress-free as possible.
Who Needs to File a Self-Assessment Tax Return?
Various individuals are required to complete a self-assessment tax return, including:
- Business owners receiving dividend income
- Landlords with personally held rental properties
- Self-employed individuals
- Partners in a partnership
- High earners making over £100,000 per year
What Tax Year Does It Cover?
The self-assessment covers income earned during the tax year, which runs from 6th April to 5th April the following year. For the 2024 tax return, it will cover the period from 6th April 2023 to 5th April 2024. This includes all of your income sources, investment income, and any tax reliefs you’re entitled to claim.
The Deadline to File
The deadline for filing your online self-assessment tax return is 31st January following the end of the tax year. For the 2024 tax year, your return must be filed by 31st January 2025.
The Best Time to File
While the deadline may still be months away, the best time to complete your tax return is as soon as you have all the necessary information in hand. This could include P60s from employers, dividend vouchers, accounts for your business, and other documentation of your income sources. Completing your return while everything is fresh in your mind is ideal.
I know what you’re thinking – if you file your return early, does that mean you have to pay your tax bill early too? Absolutely not! You can still pay any tax owed by the normal payment deadlines of 31st July and 31st January, even if you file your return well in advance.
The Benefits of Filing Early
By getting your tax return done by 30th June following the tax year end, you’ll have a full seven months to prepare for any tax bill that may be due. This means:
- No nasty surprises about the amount you owe after Christmas when money is tight.
- Time to budget and save each month for the payment due.
- Opportunity to earn interest on the money while it’s in a savings account before paying HMRC.
- Peace of mind knowing the amount and having a plan to cover it.
For those not great at saving, you can also set up a payment plan with HMRC to pay the bill in instalments.
This year, make it your goal to get your 2024 self-assessment tax return filed early and avoid that last-minute scramble in January. Your future self will thank you! If you have any questions, our team is here to help – just book a no-obligation call using the link below.
