How completing tax returns now could be beneficial

With the year drawing to a close, completing tax returns now will allow for time to review tax planning and take the weight off your mind over the Christmas period. 

What is a tax return? 

Put simply, a tax return is a document through which you inform HMRC about your income and/or gains in a given tax year.  

As an individual, sole trader business or partner in an unincorporated business, you will be required to submit your tax return through the Self-assessment process.  

If you operate a limited company, you will instead prepare a Corporation Tax return that records the profits your company has made. However, some limited company directors will also submit a personal tax return in some circumstances. 

Self-Assessment Tax returns can be completed online and must be filed before the digital deadline of 31 January.  

How to complete a tax return 

Tax returns must be completed via the Government website here. It is best to get support from an accountant to make sure you include the right information and make the most of the opportunities available to you via tax reliefs, allowances and exemptions.  

It is important that you keep records throughout the year so that you can complete your tax return accurately, these should include invoices, bank statements or receipts. There are now a wide range of apps and cloud accounting systems available to assist you with this.  

Going forward, from April 2024, you will be required to comply with the new Making Tax Digital for Income Tax Self-Assessment rules, which will require those with business and/or property income above £10,000 to file their tax information digitally each quarter and complete an annual return as well.  

What are the benefits of completing a tax return now? 

If you fail to complete a tax return on time, you may have to pay interest and a penalty. 

You should plan ahead and file your tax return in advance as you will have a better idea of what tax you owe. This will leave you in a good position to budget better and pay any tax which you owe on time. Remember the first tax payment on account is also due on 31 January.  

The sooner you file your tax return, the sooner you will hear back, and you may also receive any rebates paid back to you quickly. 

Do you need advice on related matters? Contact us today.