Your July tax payment is due – but is it correct?

Tax return

Your July tax payment is due – but is it correct?

HMRC uses your previous year’s figures to estimate your accounts for this year. If your income has fallen, the cash available to go towards tax payments might also be reduced. If this is the case, it is worth finding out whether your tax payment can be reduced. It’s simple and perfectly legitimate to see whether your payment can be reduced before the payment is made.

Reducing your tax return

Reducing the payment is easy, just download a simple form: SA303. Your tax payment could be reduced to £0 and, if you overpaid, you will receive a refund.

Making things easier

Procrastination makes easy things hard and hard things harder. When it comes to filing your tax return, the earlier, the better. Including not having to struggle meeting tax return deadlines, early tax returns can save you money in many ways. It saves you time too in the long run. These are just a few.

Evaluating your options

Filing your tax return earlier gives you more time to evaluate your options when it comes to managing your finances. If your circumstances have changed in the last tax year, filing early gives you time to seek accounting advice. You have time to consider new tax planning opportunities. If your business has grown, you may feel it is time to hire an accountant. Someone who can manage your finances and remove the tax burden from your shoulders. If you haven’t earned as much recently, then you may need time to reduce the payments that will be made on your accounts on July 31st. For this, you may need a helping hand from an experienced accountant.

Cash flow

Completing an early tax return means the funds needed to cover your tax bill will come as no surprise to you. That is, unless your accountant has failed to communicate how much you need to be prepared to pay. Putting these aside in advance, to cover your taxes, will allow you to ensure your cash flow is safe and there are no adverse impacts on your business. Make sure your accountant has given you plenty of time to get your finances in order. If they don’t, as so many fail to do, it may be time to find a new accountant who won’t be losing you money.

Filing at the last minute yourself may mean you have not given yourself enough time to make the preparations you need to be able to pay HMRC. At times like this, these interest and late payment penalties start to come into play and take their toll on your cash flow.

Tax repayments

If you are due a tax refund, it is better that you submit your tax return earlier in the tax year. At these times, HMRC is not as busy. Closer to the deadline, less organised folk stress and bombard them with their last-minute taxes. If HMRC is not quite as busy, they have more time to process your returns, and you will receive the money you are owed a lot quicker. This is a pleasant surprise for your bank account, and you’ll be glad you filed early.

Accuracy

Completing your tax return early means you don’t need to rush it. Take all the time you need to make sure all the information is accurate to avoid any nasty surprises from HMRC. You won’t be spreading yourself thin, struggling to find misplaced receipts and necessary financial information with only a few hours until the deadline. The stress of this alone is enough to make you wish you had filed earlier, or hired an accountant to do it for you. But, this comes with its own issues as so many accountants are slow and poor communicators.

Even if they don’t make mistakes, lots of accountants take too long to prepare tax returns as they fall victim to the same procrastination, or in some cases laziness, that results in the January madness. They leave the amount of the payment to the last minute, with no regard to how this will impact you and your business, often resulting in a huge shock. You may have been better off filing your taxes earlier, yourself. Or, the other logical solution is to use an accountant with a clear history of immaculate performance like Big Hand.

Big Hand is here to help you with your financial needs. Our affordable year-end accounting service means we do all the heavy lifting so you will never have to stress over your tax return again. We can even get it done within 48 hours providing we have all the information we need from you. This means if you have been cheated by a lazy accountant, we have got your back. To get started, get in touch today on 0161 327 2911.

About the Author:

Since 2013, Sophie has been an integral part of the Big Hand team. As a social butterfly, Sophie is mostly responsible for introducing new clients to the company. If you’re an avid networking, you’re most likely to meet Sophie at local events. Alongside attracting new business, she also assists with account management, and she manages payroll on behalf of clients. For fun, Sophie loves to keep fit running or playing korfball with her team. She is also in the middle of learning a new language and so her most recent challenge is attempting to read Harry Potter in Dutch.