The Benefits of Filing Your Tax Return Early
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When it comes to self-assessment tax returns, many people wait until the last minute to get things done. For the tax year 2023/24, the paper filing deadline (31 October 2024) has already passed, but if you’re filing online, you still have until 31 January 2025.
However, filing your tax return early offers many advantages beyond simply meeting the deadline. Let’s explore why it’s a smart move to submit early this year.
1. Avoid Last-Minute Stress
Waiting until January can create unnecessary pressure. Filing early gives you:
- Plenty of time to gather documents
- Room to resolve discrepancies
- Easier communication with your accountant or HMRC
By starting early, you can avoid the panic of last-minute submissions and ensure everything is accurate.
2. Know Your Tax Liability in Advance
Filing early means you’ll know exactly how much tax you owe. This is especially helpful for:
- Sole traders and landlords, who often need to make advance payments (Payments on Account).
- Those who need time to budget and plan for payments.
📌 Key dates to remember:
- 31 January 2025 – Balance of 2023/24 tax due + first Payment on Account for 2024/25 (50%).
- 31 July 2025 – Second Payment on Account (remaining 50%).
If more than 80% of your tax is deducted at source (PAYE), or your liability is less than £1,000, Payments on Account may not apply.
3. Faster Refunds
If HMRC owes you money, filing early ensures you receive your refund quickly. Why let HMRC hold onto your money when it could be earning interest in your own account?
4. Better Access to Your Accountant
Accountants get extremely busy in December and January. By submitting your records early, you:
- Get priority service
- Avoid higher last-minute fees
- Reduce the risk of mistakes caused by rushed filings
5. Avoid Penalties and Interest
HMRC penalties for late filing can add up quickly:
- Up to 3 months late → £100 fine
- 3–6 months late → £10 per day (up to 90 days)
- 6–12 months late → £300 or 5% of tax due (whichever is higher)
- Over 12 months late → Additional £300 or 5% of tax due
Even if you owe no tax, late filing penalties can still reach £1,600. On top of this, late payments attract 7.25% interest. Filing early ensures you avoid these unnecessary costs.
6. Reduced Risk of Errors
Rushed returns are more likely to contain mistakes, such as:
- Missing income
- Overlooking deductible expenses
- Incorrect calculations
HMRC can impose penalties for inaccurate returns if they believe errors were due to carelessness or deliberate actions. Filing early gives you time to double-check everything.
7. Peace of Mind
Perhaps the biggest benefit of filing early is peace of mind. You won’t have to worry about missing deadlines, technical glitches, or lost documents. Instead, you can enter the new year stress-free, knowing your return is sorted.
FAQs About Filing Tax Returns Early
Q1: If I file early, do I need to pay tax immediately?
👉 No. You can still wait until 31 January 2025 (and 31 July 2025 for the second payment) to make payments.
Q2: Can I spread out my tax payments?
👉 Yes. If your tax bill is under £3,000 and you file by 30 December 2024, you may be able to pay through your tax code, spreading the cost across the year.
Q3: Will filing early speed up my refund?
👉 Absolutely. HMRC usually processes refunds quickly once your return is submitted.
Need Expert Help with Your Tax Return?
Filing your tax return early is a smart move that offers financial clarity, faster refunds, reduced penalties, and peace of mind. It also allows your accountant to give you their best advice without the rush of January’s deadline season.
At AM Accountex Ltd, we help individuals, sole traders, and businesses prepare and file their self-assessment tax returns early — ensuring accuracy, compliance, and maximum efficiency.
📞 Call us today at +44 (0) 744 360 9141 or visit amaccountex.co.uk to get started.
