Self-assessment tax returns for the tax year 2021-22 do not need to be filed until 31st January 2023. In which case, why do we recommend that returns are prepared as soon as possible after 6 April 2022?
There are three reasons.
Reducing payments on account due 31st July 2022
You may be liable to make a second payment on account for the tax year 2021-22 based on profits for the previous year (2020-21). If your profits or income are lower in 2021-22 (than in 2020-21) we may be able to apply to reduce the second instalment due next month.
If your tax return is not completed before the 31st July, and we have not calculated your actual liability, you may be paying more tax than is required.
More time to fund any tax payments duo 31st January 2023
On the 31st January 2023, two self-assessment payment deadlines are reached:
1. Any balance of tax and NIC due for the tax year 2021-22.
2. The first payment on account for 2022-23.
If you delay completing your tax return until January 2023, you would suffer no penalties for late filing, but you would have no time to consider where you will raise the funds to pay any taxes due.
Whereas, if we completed the basic processing work to calculate your liabilities for 2021-22, as soon as is feasible after 6 April 2022, you will have months rather than days to organise funds for payment.
Tax planning
Having up-to-date information that reveals trends in your taxable income is a key element in consideration of any tax planning strategy
By processing the data that makes up your tax position for the past tax year (2021-22) as soon as possible after the end of the fiscal year, we can firstly judge if there are any options for reducing tax payments, and secondly, make any available changes to your income or outgoings to create long-term reductions in liabilities for 2022-23 and beyond.
In which case, send us your tax information for 2021-22 ASAP
By the end of this month, June 2022, you should have access to basic information regarding your income and outgoings for 2021-22, including up-to-date data from any business sources that impact calculations for 2021-22.
Let us have this information as soon as you can. We can then process this data and have constructive conversations with you to minimise future tax payments.