HMRC have just announced a two day extension to the 31st January 2012 tax return submission and tax payment deadlines.
Whilst you may think that this is good news, it raises the important question as to how people are planning for 2012 when they don’t have their accounts for 2010/11 finalised yet.
The 2011 tax return that is due now covers the year to 5th April 2011, so we are dealing with income and expenses that could date back to April 2010 in the return.
For people running a self-employed business, it is important to have up to date figures as these are used for analysing past performance as well as planning for the future.
If people are leaving it right until the deadline, and require the extra two days, then the effect on their business performance could be much greater than any HMRC fines.
Some people may mistakenly think that if you submit your tax return early it means you have to pay your tax early, when this is not the case. If someone submits their 2012 tax return say in April 2012 then the tax is still not payable until 31st January 2013 – giving them plenty of warning what their tax liability is, as well as allowing them to see if any changes are required in the current year in order to increase their profits before the tax is due.
Angelika Davey says
I completely agree with you, James.
I cannot understand why somebody would leave it until the end. The earlier you get them done the quicker you know what you have to pay and can plan accordingly (needless to say mine where done in October ;-))
Roy Law says
Nice one, James. The accounting philosophy I try and teach my Clients is “No surprises”, and this slogan encourages them to keep up-to-date. My main involvement tends to be troubleshooting accounting packages or, when I can get it, investigative work. IMHO “Accounts are not just for Year End” should be right up there with “A dog is not just for Christmas”.
Gemma Thompson says
Mine have been on my to-do list since the first of Jan … I will finish them tomorrow but it might mean I’m up till midnight 🙁
Next time they’ll be done early!
Hannah says
Hi James,
Totally agree, I did my tax return as soon as I received the notice. No point leaving it! If I was then shocked by how much I needed to owe I could save until January (luckily I didn’t have to as I was only in my 1st year of being a business owner) I am always amazed at how late people are with tax returns, it’s as if they only just received it.
Hannah
Steve - Camden CA says
This extension had certainly given millions of higher-rate taxpayers and those with untaxed income, such as landlords, freelancers and sole traders, who are required to submit a tax return each year extra breathing room.
admin says
Thanks for commenting Steve
Yes, it has given some people a last minute extra chance – the issue though is that there are only 2 months left in the current tax year and they don’t have figures for the previous one.
This makes effective planning for the current & next tax years somewhat difficult.
James