If you are one of the millions of tax payers that filed their 23/24 tax return during the final few days of January 2025, turning your attention to your 24/25 return might be the last thing on your mind right now but there are many benefits to filing your return in April , or very early in the new tax year, and we highlight the main advantages below:
- If your tax liability for 24/25 is lower than it was in 23/24, you can reduce your 31/7/25 payment on account to exactly half of the actual liability rather than overpaying. This will help your cashflow / cash forecasting.
- You will have 9 months to save up for your 31/1/26 tax payment – this is much better than discovering the extent of the liability with only a few weeks (or days!) to spare.
- Having up to date earnings figures will help with mortgage or funding applications, particularly if the return has been produced by a firm of Chartered Accountants.
- You will have time to discuss your tax affairs with your accountant and make any changes going forwards much earlier in the current tax year (it may be too late in January). Pension payment or ISA investment planning is easier with timely financial information.
- If you are due a refund (for example if your income is received net of CIS), you will receive the refund much sooner and be able to spend the cash on the business or a nice holiday.
- The transactions are fresher in your head so you are less likely to miss something which can lead to HMRC investigations or paying too much tax.
- If you are one of the self employed or landlords that need to comply with Making Tax Digital from April 2026 then you will need to complete your 25/26 accounts before the end of quarter one so why not get into the habit this year?
- HMRC penalties and interest are increasing. Doing your tax return earlier reduces the chances of falling foul of these.
- If you leave filing your return to the last minute there is a danger it won’t get filed on time thanks to IT glitches, illness or accident.
- In the current challenging economic time it is vital you know how your business has performed in 24/25 as soon as possible so you can make any necessary changes sooner rather than later.
- Your summer or Christmas holiday will be so much more relaxing knowing your tax affairs are up to date.
- There will be no more Scrabble-ing (see what we did there?) around looking for receipts from nearly 2 years ago with the clock ticking down to midnight 31 January.
At 360, we encourage all of our clients to file their tax returns early in the tax year and are already chasing the information we need to do this. We are still accepting new clients so, if you’re looking for a proactive firm of Chartered Accountants to help get your personal taxes in order, please get in touch on 01482 427360 or help@360accountants.co.uk for a free, no obligation chat.
