“Why do your tax return at the last minute”
Making Tax Digital (MTD) is coming whether we like it or not, starting with VAT returns in the second quarter of 2019. As MTD rolls out all business will effectively be making their tax submissions on a real time basis.
Personal tax will be no different in the future. Although there are no announcements about this yet, the direction of travel is clear! HMRC are collecting more and more data on taxpayers and much of it is collected in real time. As taxpayers, we are going to have to get used to dealing with our tax affairs in real time.
Each year HMRC run publicity campaigns encouraging tax payers to get their tax returns in on time and every year there is a last minute panic and significant numbers of returns are submitted late incurring penalties.
So for any clients that dislikes doing their tax return preparation – how can you improve matters?
- Have a drawer into which you throw everything related to your tax affairs so you know where everything is
- Send us what you have now so that we can get started and work out what we shall need before we run out of time
- If you delay preparation as you are worried about the amount of tax that is due, talk to us about agreeing a payment plan with HMRC – they are far more likely to agree to this if they are approached before the tax is due.
- Don’t wait until the Christmas Holiday – why spoil a holiday doing your tax return preparation
Does doing your tax return early increase your chances of a tax enquiry – this is not true! HMRC do make a number of random enquiries each year, but the number is small and the selection takes place long after the normal filing deadline has expired. You are more likely to be enquired into if you are late with your return or there is an obvious error on it.
Blog written by Willa Fairbairn
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