Why should you get your tax return in early?

This week I Hate Numbers podcast is about Why you should get your tax return in early?

Firstly, I am going to share with you the reasons as to why it is beneficial for you to send your tax return in earlier than the deadline. Secondly, I am going to share some tools and resources. Furthermore, a chance to win 50 pounds either in cash or Amazon vouchers. More of that later in the podcast.

There are many reasons why you should send your tax return in early. You may be thinking, well, that is several months ahead, I have got nothing to worry about. I will just wait and deal with it as I normally do with the many millions of taxpayers and do that in the last month or so before tax return deadline comes in. I'm going to say at the outset. That is not a good approach.

Listen to find out more.

What information do you need for your tax return?

An obstacle to starting your tax return is what do I need to get hold off? Let me share with you a resource that we share with our clients. It is available on the website, there's a link in the show notes about the information that you typically need for your personal tax return, going from what you need if you're self-employed, if you're renting property.

What can you claim for your tax return?

Calculating how much tax you owe

Furthermore, if you want to have a decent estimate of what your tax is going to be then check my website calculators. There is a bunch of business and tax calculators waiting for you.  Covering PAYE, break even, company and personal tax, and a whole lot more.

What is your money mindset?

I am fascinated by people's attitudes to money. Moreover, I take a special interest in how it affects you in your business. I am carrying out a research project on people's attitudes behind money. I would love you to share a minute or two of your time to take part and answer the survey. Now, not only will you contribute to finding more about why we have these attitudes, what we can do to improve them, but £50 is up for grabs.

What next

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Get your tax return in early. That's the conclusion of my broadcast, and I'm going to share with you the reasons as to why it's really beneficial for you to send your tax return in earlier than the deadline. I'm also going to share with you in this podcast episode some tools and resources to help you do the numbers while you're waiting for the return to be completed, and also a chance to win 50 pounds,

either in cash or Amazon vouchers. More of that, later on in the podcast,

You are listening to the I Hate Numbers Podcast with Mahmood Reza. The I Hate Numbers podcast mission is to help your business survive and thrive by you better understanding and connecting with your numbers. Number love and care is what it's about. Tune in every week. Now, here's your host, Mahmood Reza.

Hi folks. My name is Mahmood. I'm an accountant in practice who's been working for over 26 years, helping businesses of all sizes and complexity make more profits, save time, save tax, give them the business lifestyle they want, and improve their money attitude. There are many reasons why you should send your tax return in early, and by sending it early, let's think about, first of all, the deadline. Now, for the 2020 to 2021 tax-return season,

you have until the 31st of January, 2022 to submit your personal tax return. If you do not submit it on time, then you will face a fine of at least a hundred pounds and any interest on the tax due. Now, you might be thinking, well, that's several months ahead. I've got nothing to worry about, so I'll just wait and deal with it as I normally do with the many millions of taxpayers, and do that in the last month or so before the tax return

deadline comes in. I'm going to take the outset. That's not a good approach, and I'm going to share with you now the many reasons as to why sending your tax return in early is a really good thing for you to do. Firstly, let's distinguish between sending in the tax return and actually paying the tax office.

Now, if you send in your tax return now, the actual payment for that tax return does not have to be made until the 31st of January, 2022. What that means is you have plenty of time to make sure that you've got the funds put to one side to pay for that tax bill. That means that you've got more certainty as to where your liabilities are.

So, when you are planning and budgeting, you know what that exposure should be. And if I was being realistic here, as a piece of advice, I would always recommend individuals, businesses to put money aside to pay for their tax as they go along. I'll share a link in the podcast notes at the end about budgeting for your tax

and how you can estimate what your tax bill should be. So, if you've put the funds aside, excellent, you'll know if you've got enough money to pay for that tax. If you haven't put the funds aside or you haven't put enough, then you've got time to make good that shortfall. Also, if you have a fine that you haven't got the funds or you don't think you can have the funds to pay your tax, then it's more than possible to talk to HMRC,

and negotiate a payment plan, a proposal in which to spread your payments out. Think like any supplier, if you want time to pay any outstanding bills, having a conversation with them is going to be much easier once they know what the liabilities will be. Now, it's not just a question of this certainty of putting the money aside to pay for the tax, know what their target is, and that is a massive stress reliever, by the way.

I've seen that in many hundreds of thousands of people. Once they know what their bills are, it gives them a degree of comfort. And let me ask you, would you rather know how much tax you've got to pay a couple of weeks before the deadline, or several months in advance? I know which one I would pick.

Getting your tax return early also means that you've got time to get your tax return reviewed. If you're doing the tax return yourself, you can see what's going on, and then you can identify where the gaps might be, the paperwork that you might need to retrieve, the claims that you can make, and you've got time on your side to help you do that.

Let's continue talking about money. Now, in the UK tax regime, we have this system known as payments on account, and it says if you owe more than a thousand pounds worth of tax, if the circumstances are going to be pretty much similar for the following year, HMRC will want 50% of that money upfront again

towards the following year's tax bill, and that can be quite a bit of a shock to the system if you're not used to doing it. If you are really in the tax system and you are used to paying payments on account, getting your tax return early may mean that you can revisit those payments that you've made. So, we're talking about certainty, a degree of comfort, knowing what you've got to pay several months before you have to make that payment.

You're talking about the opportunity to find ways of actually smoothing out the payments of that tax bill, talking to HMRC, coming out with a payment proposal. Bear in mind, folks, for those of you who've been claiming this self-employed grant, the self-employed grant is a good positive injection during the pandemic, but it's also taxable and subject to national insurance.

Now, what are the other good reasons for getting your tax return in early? Well, other good reasons for getting your tax return in early is that if you are somebody who normally gives your information relatively late to your accountant, if you've got one, then you'll tend to find a) that puts pressure on your accountant because they'll create a bottleneck, and certainly, in my firm,

we tell clients well in advance, at the very beginning of the tax year, that if for any reason their paperwork comes in relatively late, very close to the deadline because of the investment that we have to make, it's likely there'll be a premium charged on that late submission of paperwork. And that's becoming more and more standard practice.

So, if you want to manage your fee budget positively with your accountant and not put too much strain on them, not having them burning the midnight oil with hundreds of tax returns to get through, then earlier is better. If you've got a mortgage that you're thinking, you're thinking of moving house, remortgaging your property, then the lender will want sight of your tax returns, and if you can get your tax return in early, then you can produce the documentation in good time to give to that mortgage lender.

Stress, well-being. Having that clarity, knowing what lies ahead, certainly in paying tax, is a real positive boost to what goes on behind your ears. And I've seen thousands of people over the years, when those tax returns are submitted and they're reviewed, and when the returns are finally submitted, it's amazing the relief that there is knowing that there is one obligation out the way.

That's one task that they have to do. You have no choice in the context of tax to submit that tax return. It's out the way, and that's one task that's ticked off. Very much like that messy bedroom or that sort of piece of work in your entry that you're dreading doing. It's that amazing boost to your well-being when you've done that task and got it out of the way.

Now, if you're thinking, one of the obstacles about starting my tax return is what do I need to get hold of? Let me share with you results that we share with our clients. It's available on the website. There's a link in the show notes about the information that you typically need for your personal tax return, going from what you need if you are self-employed,

if you're renting property, if you're in a part-time or full-time job, and it'll go through the typical documentation, the information that you need to start gathering to start that process of doing your tax return. As an additional bonus within that same download, there's also a list of typical expenses that you can claim

if you are self-employed. While you're waiting for your tax return to be submitted, or you're thinking, I want to have some idea what tax I'm going to pay, don't get yourself on a kerfuffle. Don't get stressed out. Getting the tax return in promptly, getting the tax return prepared will give you the certainty of what that tax bill is.

Now, if you don't want to wait, you want to have a rough estimate of what your tax is going to be, then check on our website and there's a suite of business calculators there whereby you tap in a few numbers and within a few seconds you'll have a pretty damn good estimate of what your tax bill is likely to be.

Now, I mentioned earlier on at the very beginning of the podcast about a 50-pound cash prize bonus up an offer. Now I'm fascinated by people's attitudes to money. People in business, we think about money, we talk about money, we plan what we're going to do with more money. We don't really often deal with money correctly in our businesses,

and underpinning all that is our attitudes to money. Now, I'm carrying out a research project on people's attitudes behind money. We've got some fantastic responses so far. Several hundred people have already responded, and I'd love you to share a minute or two of your time to take part and answer the survey.

Now, not only will you contribute to finding more about why we have these attitudes, And what we can do to improve them. Not only will you get the opportunity to share in and be informed of what the results of that survey are, but also there's a great opportunity to have a prize of 50 pounds. So, I will be doing a draw at the end of May, and the winner will either receive 50 pounds in hard cash or a 50-pound Amazon voucher.

There are other vouchers out there. Amazon, for me, is a pretty good one. Check out the show notes. You'll find it all there. So, let's round up folks about the reasons for sending in your tax return early. There are more good reasons for sending your tax return in early than actually delaying it. So, there's that certainty of what the tax is.

There's actually knowing the funds are going to be there or what you need to save to get there. There's relieving the stress and that's a massive bonus there in terms of your well-being. There's the fact of knowing that's one tedious task out the way. There's a potential opportunity for you to reduce your fees if you've got an accountant who's doing your tax return,

or certainly not putting too much stress on there. Have that positive relationship. So, folks, hope you got some value out of this podcast. I'd love it if you could subscribe. Share it with your friends and families. Until then, I'll see you next week.

We hope you enjoyed this episode and appreciate you taking the time to listen to the show. We hope you got some value. If you did, then we'd love it if you shared the episode. We look forward to you joining us next week for another I Hate Numbers episode.