It’s worth making time for tax before your December holidays. Apart from not having to worry about your paperwork when you should be relaxing, there are a few additional perks for those who submit their returns ahead of the 31 January deadline.
While it can be tempting to leave your return to the last minute, you might want to reconsider, as certain taxpayers can secure a cash flow advantage by filing more than a month earlier.
This perk applies to those employed on a PAYE basis who have earned additional income during the year on which they owe tax. If you owe less than £3,000 tax and file your return before midnight on 31 December, or earlier, you can request that the payment is spread over the following tax year and taken in equal instalments from your PAYE earnings.
The HMRC computer system captures requests and calculates whether the underpaid tax can be feasibly spread over equal instalments in the following tax year. It’s worth making time for tax in December – as there are a few good perks for those who submit their returns a month ahead of the 31 January deadline.
This underpaid tax does not necessarily have to relate to your employment. It can include higher-rate income tax on investment income, freelance work or tax on property rental income.
Last year more than 24,000 taxpayers took advantage of the early submission benefits, submitting their Self Assessment returns between Christmas Eve and Boxing Day:
- 17,644 people lodged returns on Christmas Eve
- 1,773 people filed their return on Christmas Day
- 4,811 filed on Boxing Day