Whilst this applies to the submission of paper tax returns to HMRC, there are several advantages to completing the personal tax return now rather than waiting right until the final tax deadline in January:
1) You will know exactly what your tax position is in advance – the final January deadline is also the tax payment deadline, so if the return is left until then you may suddenly find that you have a tax bill to pay that you hadn’t planned for.
2) Return processing times are usually quicker at this time of year, so submitting the return now will mean that the position can be agreed in advance of the statements of account being issued at the end of the year.
3) You may be able to have tax liabilities collected in future years by instalments through your notice of coding. Provided you have suitable employment or pension earnings, and the tax liability is below £3,000 then this is an option. Before the 31st October HMRC guarantee to collect the tax this way, however after the end of the month there is an increasing chance that this will not be an option.
Kieran O'Connor says
Interestingly, I was at an agent strategy meeting this week with HMRC where they were encouraging us to support the move away from paper filing altogether.
I expect paper tax returns to be phased out very soon.
JamesMcBrearty says
Indeed, yes we have always filed our clients returns electronically where possible.
Whilst the 31st October deadline is for paper forms, it’s also a useful deadline for focussing people’s attention on the upcoming tax payment deadline in January.
There is also the Coding issue with the 31st October deadline being set by HMRC.