Leave Tax Anxiety Behind: 5 Reasons To Update Your Self Assessment As You Go
The Self Assessment is like that subject you didn’t like at school – you just can’t help but to leave the work for it until the last minute. However, there is a better solution than burying…
10 Minute Read
Updated: 14 Jan 2020 Created: 14 Feb 2019
The Self Assessment is like that subject you didn’t like at school – you just can’t help but to leave the work for it until the last minute. However, there is a better solution than burying your head in the sand: update your finances throughout the year and save yourself the tax anxiety.
Here we explore just five of the reasons why submitting as you go is a smart move.
1. It boosts mental health
Staying on top of tax allows you to be in full control of your finances. Not doing so will likely result in sleepless nights and unwanted stress.
You can manage income and outgoings by updating your records as you become aware of them. This will boost your confidence and help you feel empowered – and will also save you from nasty tax shocks and feeling anxious or low life satisfaction.
2. It allows you to save
If you know your financial situation throughout the year, you’ll be able to ensure there’s enough money to make any tax payments owed. This includes the payment on account, which many taxpayers often forget about until they’re notified by HMRC.
So instead of keeping savings stowed away for January alone, make sure you have sufficient available funds for this equally important instalment.
3. It ensures correct tax payments
The chances of not having put enough money aside to pay the tax you owe become more likely if it’s not calculated properly – and this can happen if you rush the Self Assessment. You might type in the wrong figure, forget to include specific information, or neglect to offset your expenses.
Both under- or over-paying on your tax can be incredibly stressful. Updating throughout the year means you can sidestep HMRC penalising you or the wait for a refund. You’ll be able to guarantee all the data entered is correct, and claim your expenses as you make them – even from your smartphone.
4.It avoids penalties
It’s not just underpaying tax that HMRC may hit you with a penalty for. You also risk this if you don’t submit your tax return on time.
Inputting all the information for an entire tax year can be quite time-consuming. Not being able to complete your Self Assessment by the deadline becomes more probable the closer to the wire you get. Updating your tax return as you go will ensure that you can file far ahead of its due date, avoiding penalty points and payments.
5. It helps you prepare for Making Tax Digital
Submitting your information on a regular basis is a lot easier if you do so digitally. April 2019 will see Making Tax Digital come into play for VAT, and 2020 may see this extended to Income Tax. However, HMRC have indicated there may be a delay due to Brexit. In any case, being ready is key.
And you can do so by practising complying with the methods required for the digitalisation of tax. Take the time now to get used to employing tax software for your records.
Easy-to-use tools like GoSimpleTax will come in handy. You’ll be able to say goodbye to any pressure by inputting your information whatever the time of year. The tax owed is automatically adjusted to reflect any additional data, providing you with a full picture of your financial affairs in real time. On top of this, tax-saving recommendations are offered where relevant, so you can lower your liability.
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