Why is it important to file your Self-Assessment early this year?
Why is it important to file your Self-Assessment early this year?
Over 300,000 people filed their tax return in the first week of the new tax year, almost 10 months ahead of the 2024-25 deadline.
With Making Tax Digital (MTD) for Self-Assessment just around the corner, this will be the last year that a straightforward, single self-assessment tax return is available for landlords, sole traders and self-employed with income over £50,000, as from April 2026 MTD will begin, which will be in addition to the annual self-assessment tax return.
The deadlines for self-assessment taxpayers for tax returns for 2024-25 tax year is 31 January 2026 for online submissions and 31 October 2025 for paper returns for this year.
Mandatory MTD for Income Tax will be rolled out to landlords, sole traders and self-employed earning over £50,000 a year. MTD will be compulsory from April 2026, changing the tax landscape and raising compliance costs across the board as these taxpayers will have to file quarterly digital reports with HMRC, as well as a fifth return which will be a year end summary.
Early filing of self-assessments is still the exception and not the norm, with the week one total up by less than 10% compared to the previous year.
There were 57,815 early filers on the opening day, which was a Sunday, compared to 67,870 people who filed on Saturday 6 April 2024. HMRC is encouraging people to file early so they know what tax they owe sooner, plan for any payments in advance and can avoid the stress of leaving it until January, and for some early filing makes sense, giving peace of mind to focus on the business in hand.
MTD will continue to be rolled out in subsequent years which will mean that a large percentage of those who file self-assessments will need to adopt the new way of filing over the next few years. The importance of getting into the habit now with regards to your self-assessment ensures that not only are you enrolled into MTD in the correct year but also that you have your tax in order.
If you need our help, please get in touch – info@kennedysaccounting.uk the team will be pleased to help.