Why your clients should file Self Assessment tax returns early

Written by

Parth Shah

Self Assessment is one of the crucial obligations lots of people have to complete by the end of January, but it is astonishing how many end up missing the deadline.

A big part of this is procrastination — people simply do not want to think about taxes, and thus put it off until the last minute when they frequently find that it takes longer than expected or that the HMRC website is acting up.

As an accountant, you must work with your clients to encourage early Self Assessment filing. Here are some compelling reasons you can put forth to convince them:

2. Filing Self Assessments take time

The HMRC needs to be informed ahead of time that they can expect returns from someone, which means that your client needs to register online well in advance of the deadline if they have not already. Completing the registration can take up to two weeks during slack times but much longer during the January last-minute rush.

When your client signs up, they will get a Unique Taxpayer Reference (UTR) that they need to register for HMRC Online Services, and HMRC will also send them a PIN / Access code which will help them access the Self Assessment portal online. Both the UTR and the PIN / Access code come only by post, making it all the more imperative to start early.

2. Real-time business KPIs

It is no secret that filing Self Assessment tax returns calls for a lot of paperwork. Gathering all of it takes its own time, particularly if some of those documents are only provided in hard-copy format. Many documents may not even be available if sought too close to the 31st January deadline.

Even for those of your clients who download and maintain monthly records, last-minute mistakes and omissions are bound to happen. Filing early thus allows them to collect all the documents and records they need in a timely fashion without having to stress at the last minute.

3. HMRC call centres are always busy in January

Given the vast number of taxpayers submitting their Self Assessment returns in January, your client will be lucky to even get through to anyone on the HMRC customer service number.

In January 2021, the average waiting time for a caller was about 14 minutes, while around one in five callers could not even get through. If your client needs help with their Self Assessment, therefore, it is all the more crucial to file early.

4. Create extra time to save on tax bill

Your client’s tax bill is not due until January 31st. Therefore, if they choose to file early, they will have extra time to budget for whatever tax they owe. A late filing, by contrast, could lead to your client not having enough money to pay the taxes, which could attract hefty HMRC fines.

5. Your clients can avoid penalties

HMRC is hard on people who fail to file their Self Assessment tax returns on time. You know that better than anyone else. Even if they have no tax bill, your client can face the following penalties:

1 day late — £100 fine

3 months late — £10 a day fine up to a maximum of £900 (90 days) for every day it is late 

6 months late — £300 fine or 5% of the tax owing, whichever is greater

12 months late — Further £300 fine or 5% of the tax owing, whichever is greater

Filing early helps to address any issues in advance and avoid these penalties.

6. Your client may be in line for benefits

Some of your clients, especially those who have a business of their own in addition to a salary, might be in line for a tax refund. By filing early, HMRC can notify them straight away and start the refund process, after which your client will get the money in a few weeks. The extra cash can help them plan expenses for the next few months more efficiently.

7. Starting early can save Christmas

The past 1.5 years have been nothing short of a roller coaster ride. Most people are looking to catch a break in December. Many of your clients may postpone taxes until after the holiday season so that they can enjoy Christmas properly.

However, even the prospect of filing a Self Assessment is daunting for many, especially those who are self-employed or run their businesses. Therefore, your clients may exacerbate their stress by putting it off, which will, in any case, mar the Christmas festivities.

Plus, let us not forget the amount of paperwork that will pile up for you at the last minute. Therefore, convince your client to do it in advance and get it over with. That way, both of you can rest easy and enjoy the holidays.

Get in touch with your clients today!

A lot of people have to file their Self Assessment, so you might as well start reminding your clients. The sooner they provide you with the necessary details, the faster you will file the returns.

And if you are concerned about the increased workload on your team, you can always rely on our expert accountants who will prepare and file the returns for you. Have any questions? Contact us!


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