- 31 October is the last day you can complete a paper tax return for this year. Those submitting online have until 31 January – but there are seven good reasons to start now.
- 295,250 people filed a self-assessment tax return in the first week of the tax year – up by 50,000 in a year. The first Monday of the new tax year was the peak day.
- It’s a drop in the ocean compared to the 778,068 who filed on 31 January 2024 – the last possible day.
Sarah Coles, head of personal finance, Hargreaves Lansdown:
“The best time to do a tax return is always ‘yesterday’, but the second-best time is today. You’ve missed your chance to be a super-keep early bird, but the paper deadline is always a great reminder that the job needs to be on your to-do list sooner rather than later.
It’s miles more sensible than leaving it to the last possible day – or the last possible minute – when you’re likely to be stressed, rushing and prone to mistakes.
Seven benefits for early birds
- You can set up a budget payment plan
This lets you set up regular weekly or monthly payments, so you don’t have to face the bill in one horrible lump sum. You can also pause these payments for up to six months, if you run into cash flow headaches.
- You can plan ahead for the payment
You should be setting aside money to cover your tax bill as you go along, but things don’t always go to plan, so by getting on top of this now you have a few extra months to put cash aside to cover a shortfall.
- If it turns out you don’t actually need to file, you can withdraw
If your circumstances have changed and you don’t need to file a tax return, you need to act now and let HMRC know, so they can have time to issue a withdrawal notice before the end of January. If you leave it to the deadline, you’ll need to do a tax return anyway in order to avoid a fine.
- You may get a speedy tax refund
Payments don’t have to be in until January, but if HMRC owes you money, your refund will be processed straight away. And because HMRC isn’t as busy at this time of year, it should be fairly speedy.
- You can do some tax planning before you file
Most of what you do now will only affect your tax bill for the current tax year, but there are a handful of ‘carry back’ opportunities to cut your bill for the year you’re filing a return for. If you give money to charity using gift aid, the charity will reclaim basic rate tax, but higher and additional rate taxpayers need to claim the difference through their tax return: you can carry back this claim. It means you can make a donation now, and include it in the tax return you’re filing. This is particularly useful if your income is going to fall below a tax threshold this year, because you can claim gift aid in a year when you were paying a higher rate of tax.
Another carry back rule applies if you’ve invested in an Enterprise Investment Scheme (EIS) in the current tax year, and you want to carry back income tax relief of 30% to the previous year. You can’t claim back more relief than the tax you have paid, so this is particularly useful if you won’t earn enough to offset the tax relief this year.
- You have longer to correct mistakes on previous tax returns
If completing your tax return makes you realise you’ve made a mistake on the previous year’s return, then you have until 31 January to submit an amendment. If you leave it all to the last minute, it’s easy to be so busy with your tax return that there’s no time to amend the previous one.
- You have time to consider what the process has revealed about your finances
If you spent ages digging out details of interest payments, dividends or profits on share sales, you can consider consolidating to simplify things. If you ended up paying tax on savings or investments, you can look for ways to shelter them from tax, like ISA and pensions.
Even if you didn’t pay any tax on them, you’ll have had to include all the details on your tax return, so it’s a handy reminder that if you were to move them into an ISA, you could avoid this time-consuming paperwork too. You might be bored of admin at this stage, but a few minutes now should make the whole process easier next year.”
