Reasons to file your tax return early

If you need to file a Self Assessment tax return for 2022/23, you have until midnight on 31 January 2024 to do so, as long as you file online. 

However, HMRC has been encouraging taxpayers to file their tax returns early. Is this worthwhile and what are the benefits?

Tax refund

If you think you might have paid too much tax in 2022/23, filing your tax return early will enable you to claim a refund sooner – you do not need to wait until January 2024. The money is arguably better in your bank account than in HMRC’s.

Better budgeting

Filing your tax return early will help you budget, and if you have tax to pay, give you more time to put funds aside to meet your tax bill. If your tax and Class 4 National Insurance bill for 2022/23 is more than £1,000, unless 80% of it is deducted at source, for example under PAYE, you will need to make payments on account for 2023/24. 

The first payment on account for 2023/24 is due by 31 January 2024, along with any balance remaining due for 2022/23 and any Class 2 National Insurance for that year. The second payment on account for 2023/24 is due by 31 July 2024. Each payment is 50% of your 2022/23 tax and Class 4 National Insurance liability.

Struggling to pay?

By filing your tax return early, you will know in advance what you owe. If you know you will struggle to meet your tax bills, you can set up a Time to Pay agreement to allow you to pay your bill in manageable instalments. 

What is the time to pay the agreement? Time to Pay arrangements are based on the specific financial circumstances of whoever owes a debt, so there is no ‘standard’ Time to Pay arrangement. The arrangement is designed to be flexible and is not a fixed, formal contract. It can be amended over time, so it can be shortened if your earnings rise or if you receive a cash windfall (for example, an inheritance). It can also be lengthened if your essential expenses increase or your income reduces. Find out more on the official website. 

Easier access to help

Although HMRC closed their Self Assessment helpline during the summer, it reopened on 4 September. HMRC helplines become very busy during January as the deadline approaches. Filing your return early will make it easier to access help from HMRC if you need it. 

Peace of mind

Filing your tax return early will give you the peace of mind that comes from knowing that the job has been done. It also means that you won’t risk a late filing fee of £100 for missing the filing deadline.