Three reasons you should file your Self Assessment early
There’s no word or phrase in the English language that sends a shudder down our spines quite like Self Assessment. Well, with the exception of Brexit, anyway.
If you’re heading into Self Assessment season with an “I’ll do it tomorrow” philosophy, you’re not alone. 2.6 million people had still not filed their Self Assessment with HMRC in the January of 2018 – nearly a quarter of all those who were due to file by the 29th of the same month.
At Crunch, we’ve seen our fair share of Self Assessment seasons over the years, and if there’s one thing we’ve learned, it’s that the earlier you file, the better. In case you still need convincing, here are three reasons why you should file your Self Assessment early.
You can actually enjoy your Christmas
Christmas can be a stressful time, what with “Fairytale of New York” on every station, the pressure to send a card to everyone you’ve ever met, and turkey preparations beginning at least six weeks in advance of actually eating the thing. But our Crunch: Safety in Numbers report revealed that over half of the small businesses we support attributed their holiday stress to the looming Self Assessment deadline. Christmas is a time for family – for recharging your batteries and celebrating life with the people nearest and dearest to you. The last thing you need is the worry and strain of a Self Assessment hanging over the festivities. For a lot of small business owners, Christmas is one of the few times of the year they can guarantee themselves a few days away from work to put their feet up and relax. Getting your Self Assessment sorted before you’ve opened the first window on your advent calendar is the perfect way to kick off the Christmas season, and make that eggnog taste all the sweeter.
HMRC aren’t easy to get hold of in January
Just as night follows day, a New Year’s hangover follows a stressful Christmas. Unfortunately, the issues you’ll be creating for yourself if you’ve still not filed by January can get all too real all too quickly. Gathering all the resources and evidence you need to accurately file a Self Assessment is not a quick job – up to a fortnight isn’t unusual, even at some of the quieter points of the financial year. Now imagine how much longer the process could take when you’re one of the 2.6 million people we mentioned earlier, all rushing to file before 31st January. You wouldn’t choose to get on the motorway with 2.6 million cars in your lane, so why would you try to contact HMRC with a similar number clogging up the phone lines? Leaving the process til the midnight hour puts you at risk of not getting through, reducing the likelihood of HMRC being able to answer your questions, and making the entire process a thousand times more unpleasant than it ever needed to be.
You’ll spare yourself a fine
This leads us nicely onto perhaps the most prominent and pertinent reason to file your Self Assessment early: avoiding a penalty from HMRC. The taxman isn’t known for being merciful, after all.
The penalties for a late Self Assessment filing include:
A £100 instant fine if you miss the January 31st deadline
£10-per-day fines (for up to 90 days) if you haven’t filed by 30th April
A £300 fine (or 5% of the tax you owe – whichever is greater) if you still haven’t filed after another 90 days
Another £300 fine (or 5% of the tax you owe – whichever is greater) if you still haven’t filed within a year
Additional penalties – including up to 100% of owed tax – if HMRC believes you are intentionally delaying your filing.
Not the way you want to start the new year.
If you need any more convincing, you can check out our “Seven reasons why you should file your Self Assessment early” article for even more motivation to get your Self Assessment sorted. You can also download our Self Assessment guide for all the information you need, including how to register, what paperwork you need to gather, and how to file.
If you need further support with your Self Assessment, then maybe you should think about hiring a great accountant? If you become a Crunch client we can file on your behalf! Find out more about how we can help support your business and spare you the hassle and stress of Self Assessment season.