6 Reasons for Contractors to Complete Their Tax Return Now

Tax return

One thing most contractors have in common is that they have a great many demands on their time, so when we say you should be spending this valuable commodity on filing your tax return, it might seem like a lot to ask, given that we’re still months away from the deadline. However, we know from experience that contractors who submit their return early have an easier time and it really is in your best interests to get it done now. Here are the six most important reasons why.

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You’ll know how much tax you owe

It’s always better to know what’s going to happen, rather than guessing. As with any business costs, the earlier you know how much tax you have to pay, the easier it will be to plan for it. Filing your tax return now removes any uncertainty; you’ll know exactly how much you owe and you’ll have much more time to budget. If you’re quick, we might even be able to change your July payment on account!  

Your tax planning strategy will be more effective

Even if you squeeze your return in under the wire and manage to avoid penalties for late filing, leaving it to the last minute could still be an expensive mistake.

Given time to dedicate to it, your accountant can help you implement an effective tax planning strategy that will minimise your tax and save you money.

Preparing your return right up against the deadline severely limits your opportunity to take any tax-saving action, meaning you could end up paying more tax than you need to.

You’ll get your refund sooner

We’d all prefer our money to be in our account rather than the tax man’s. The earlier you file your return, the sooner any repayment you’re owed will reach you. Why let HMRC hold on to your cash?

Avoid the panic

We’ve all had those panicked moments, when we must quickly locate an object or document that we filed away months ago. Often, the tighter the deadline, the harder it is to assemble everything we need. Issues with your computer or your internet connection take on a new and ominous power when you’re rushing to hit an important deadline.

If you’re anything like us, you’ll find it much easier to be organised when time is on your side. The details you need, the location of important documents, your passwords and login information, are all easier to find when you’re not in a rush. And if your internet connection goes down you can have a cup of tea and come back later.

Right now, we imagine it would be easy to locate the P60 that was issued to you in May, or your P11D from July. Will you find it just as easy in December, when you have to find them right away to avoid paying penalties for late tax return submission? Maybe, maybe not, but why take the risk?

It will remove the risk of a penalty for filing your tax return late

Who knows what might happen between now and the filing deadline? What will life look like in December, how far will you have come, what challenges will you be facing?

Between then and now, there are almost infinite opportunities for life to surprise you, distract you, or for your situation to change. It’s easy for anyone’s good intentions to be derailed by unexpected events.

Until you’ve completed your tax return, there is a risk that you won’t manage to do so in time, and late filing will earn you a penalty of at least £100. Besides, wherever you are as 2019 draws to a close, you won’t be sorry that you’ve already completed your tax return.

It’s one less outstanding task

Life inevitably fills up with stuff to do, and that’s even more true for contractors, who tend to have lots of competing demands on their time. December is the month of the spiralling to-do list, and the last thing you’ll want is another urgent task to complete. Why not give your future self an early Christmas present, and tick the task off now?

If you have any questions or if we can help in any way, please contact our expert team on 01296 468483 or email info@orangegenie.com.

 

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