How one person was penalised for filing their Self Assessment tax return too early

Completing your Self Assessment tax return will likely result in a sigh of relief. It’s best to get your filing done before the 31 January deadline, but if you file your return too early, you may risk being penalised.


Most people fear missing the deadline, but those who are extra organised may face a unique set of circumstances, including unexpected consequences for your tax coding.

Consistently filing your tax returns too early could see your monthly pay being unexpectedly reduced.

A recent case documented a taxpayer who filed his return for the year 2013/14 in mid-2014, well ahead of the January 31 2015 deadline. According to his calculations, tax was due. HMRC factored the underpaid tax into his tax code and adjusted his PAYE tax.

The taxpayer proceeded to complete and submit his Self Assessment return for 2014/15 year in May 2015. While it was eight months ahead of the deadline, tax was due.

In this instance, it was not only the taxpayer who was particularly efficient. HMRC picked up on his filing habits and contacted his employer. A new tax code was issued, resulting in his pay being further reduced.

By filing early, this taxpayer was in effect paying two years’ worth of tax simultaneously, as underpaid tax for the 2014/15 year was being paid well ahead of the due date.

HMRC can automatically adjust a person’s PAYE tax code, in order to collect taxes sooner than when they are actually due. For people subject to Self Assessment, this can be avoided by indicating your choice of paying future taxes via your tax code, via a monthly salary deduction, or once a year, with the Self Assessment season.

Want to make sure that you don’t pay more tax than you need to? Our team of experienced accountants is on hand to help. Send us an email or give us a call on 0808 141 1643 to find out more.