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Gloucestershire Business News

More taxpayers choose to file returns early

More than 63,000 people made themselves early birds by filing their latest tax return online on the very first day of the new tax year.

And with almost 950,000 online Self-Assessment returns received so far this tax year, HMRC is urging others to do the same. Each year, thousands of people choose to file early, as soon as one tax year ends and the new one starts.

Rob Case, tax partner with Cheltenham accountants Randall and Payne, said: "It is positive to see so many Self-Assessment tax returns filed early. I suspect the Coronavirus pandemic will have increased the early submission numbers. We too have had an influx of information from clients so far and as a firm always encourage early preparation of a tax return."

HMRC has seen a growing trend in early filers. In the last five tax years, the number of customers choosing to file on the first day (6th April) has almost trebled from 22,885 in 2017 to 63,521 in 2021.

Myrtle Lloyd, HMRC's Director General for Customer Services, said: "There are many advantages to completing your Self-Assessment tax return sooner rather than later, not least that if you're due tax refund you'll get the money within a few days.

"Our new online guide helps answer many of the questions customers have about Self-Assessment. Go to GOV.UK and search 'file your tax return early'."

Rob Case added: "As HMRC suggest not only does it ensure that refunds due to taxpayers are issued promptly, but if there is scope to reduce future payments on account then this can also result in a cash flow advantage and more importantly individuals know exactly what their tax position is, in good time."

He said that with 'Making Tax Digital' on the horizon for Income Tax, people will have to get used to submitting timely information to HM Revenue & Customs.

Nick Haines, tax partner at Hazlewoods said: "Filing your tax return early has its benefits. Not only do you know how much your tax liability is, allowing you to plan cash flows for the next ten months, but in a year that has been affected by COVID-19, there may be opportunities to reduce the payment on account that is due on 31 July 2021 or, indeed, receive a refund sooner."

Nick added "Putting the tax return off until January doesn't make the tax liability go away, so taking action now gets it off your list of things to do and gives you time to plan how to spend the monies not due to HMRC, hopefully on a summer holiday!"

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