Do you yearn for a more organised approach to filing your tax return and company accounts to avoid last-minute panic? It’s a familiar story! Here at Jameco Group, one of our golden rules is that filing early is more than just best practice; it’s a strategic choice with significant benefits.
Filing your business accounts early offers several benefits: it helps avoid penalties, enhances cash flow management, allows for proactive tax planning, ensures compliance, and supports strategic financial decisions. Early filing also has the potential to accelerate tax refunds.
This blog article explores the key reasons you should consider filing your accounts sooner rather than later and how doing so can positively impact your business.
For tax advice tailored to your business needs, please feel free to get in touch.
What is the deadline for filing company accounts to the HMRC?
Filing annual company accounts and tax returns on time is a legal requirement in the UK, and the deadlines set by HM Revenue and Customs (HMRC) depend on your business structure, i.e. whether you’re a sole trader or a limited company. Understanding these deadlines is vital for maintaining a good reputation with HMRC and managing your tax liabilities effectively.
As a self-employed sole trader, you must complete a self-assessment tax return annually, which is used to calculate Income Tax on your profits. The deadline for filing your return and paying your tax bill is the 31st of January, following the end of the tax year, which runs from the 6th of April to the 5th of April of the following year.
For a sole trader, filing tax returns early has several benefits. It can give you a clearer understanding of your finances and more time to save for your tax bill. It can also speed up tax credit claims or refunds due for overpaid tax so you can get it into your bank account to earn interest and help with cash flow.
Our advice is to file your return early and forget about it!
Limited companies in the UK have specific deadlines and responsibilities when it comes to filing accounts and tax returns. Statutory accounts must be filed with Companies House annually, including a balance sheet, profit and loss statement and accompanying notes. The deadline is typically nine months after the company’s financial year-end.
A Corporation Tax return should be filed with HMRC no later than 12 months after the end of the accounting period it covers.
How early can you file your accounts?
When filing your accounts, the earlier, the better is a wise approach. Limited companies can file statutory accounts with Companies House as soon as year-end has passed and your accountant has produced the reports, even if this is well before your nine-month post-year-end deadline.
For sole traders, you can submit your self-assessment tax return as early as the day after the tax year ends on April 5th.
Why should you file your accounts as early as possible?
Filing your accounts and tax returns early is more than just a tick on your to-do list; it’s a strategic move with numerous benefits for your business. Here’s why it’s a smart choice:
Strategic financial planning
Filing early provides a clearer picture of your financial health sooner. This insight is invaluable for strategic financial planning, allowing you to make informed decisions about investments, expansions, or scaling back. It helps in forecasting future financial requirements and setting realistic financial goals.
Cash flow management
Early filing can significantly enhance your cash flow. It gives you an early warning of any potential cash shortfalls and allows you to identify surplus cash for reinvestment or debt reduction. Understanding your tax liability earlier lets you plan and allocate resources more effectively.
One of the most immediate benefits of early filing is avoiding late penalties. These penalties can escalate quickly and have a significant impact on your finances. Early submission ensures businesses stay ahead of the payment deadline to avoid these unnecessary costs.
Staying compliant with HMRC’s regulations is crucial for any business. Filing your accounts early helps ensure that all your financial affairs are in order, reducing the risk of compliance issues. It also gives you more time to correct any account discrepancies or errors.
What happens if you don’t file company accounts on time?
Failing to file your company accounts with HMRC and Companies House on time can lead to significant penalties. Initially, you may incur a fine, which increases until you pay it and submit the necessary documents. You will also accrue interest on the unpaid tax.
Late filing can disrupt cash flow and potentially jeopardise tax credits and refunds. It can also impact your business’s credit rating, making it harder to secure financing or favourable credit terms with suppliers.
In the worst-case scenario, persistent lateness can result in higher penalties and even lead to your company being struck off the register.
It’s crucial to note that these penalties apply even if there is no tax to pay. Even if the tax due is paid on time, you still risk a penalty if you file your return late.
So, once again, we urge you to file your tax return early and forget about it!
Choose Jameco Group to take the hassle out of tax returns
The Jameco team of tax experts can ensure you meet your tax and annual accounts obligations, freeing you from last-minute panic. We will help compile your company accounts, liaise with HMRC on your behalf and plan for your tax payments way in advance of the deadline day.
Combined with our Xero bookkeeping and tax planning services, we can ensure that you have an accurate view of your finances at all times and can plan ahead for your tax liability. You can rely on us to keep your business and personal tax affairs in perfect order, saving you a lot of time, stress and effort.
Contact us today and enjoy the benefits of filing your tax return early.
Frequently asked questions about filing business accounts
When should I start preparing my tax return?
The best time to start preparing your annual accounts and tax return is as soon as your company’s financial year ends. Gathering all the information: financial documents, bank statements, and other relevant information immediately after the year-end can streamline the process to ensure you have ample time to review your financial activities and start saving for your tax bill.
Does HMRC automatically give a tax refund on overpaid tax?
HMRC reviews tax accounts after submission to ensure there is no overpaid tax and in most cases, they will issue a tax refund automatically. However, this process depends on the accuracy and completeness of the information in your tax return.
It is essential to ensure that all details, including income and allowable expenses, are reported correctly to speed up the refund process. As a rule of thumb, if you file your tax return early, you can expect to receive your tax refund earlier rather than waiting until the deadline.