On The Spot Blogs
#Tax Myth 4 - Submitting my tax return early, means I pay my tax earlier
Now we've just finished the usual flurry of last minute income tax returns, it's a good time to remind ourselves why we should submit our income tax and corporation tax returns early.
When I suggest this to people, about a quarter of them query it as a bad idea because it means the tax is due earlier.
This isn't true for any tax payments. Tax due dates are fixed according to accounts and tax year ends.
What submitting your tax returns early does is provide more certainty about whether HMRC might have a query about your accounts, tax calculation and tax return.
A time limit starts from the day you submit your return. HMRC have to raise their enquiries within 12 months of the date your return is submitted.
If you hear nothing you can be reasonably comfortable there isn't anything they want to ask you for that year.
It doesn't provide 100% certainty because if they find an issue in a subsequent year. HMRC are able to revisit earlier years, but it does provide some comfort.
And to be near-to or late in filing your accounts and tax return is likely to be a factor for HMRC when considering who to open enquiries into.
Even if there is still an enquiry and an adjustment is agreed with HMRC, you have nipped the issue in the bud so there will be fewer months or years in which you might have repeated the error.
Many years of experience in accounts and tax has shown me that having the space and time to prepare figures without an immediate deadline, means more time to get clarification on potential issues, a more accurate return and a better service for you.