1. Faster refunds
If your contractors believe they have paid too much tax in the previous tax year, it's beneficial for them to complete their tax return early so HMRC can repay this to them sooner.
2. Extra time to plan liability payments
Your contractors, may find that they have additional tax to pay and although the payment deadline is not until the 31st January 2016, completing their return and confirming their liability sooner will allow more time for them to plan for this liability.
3. Payments on Account
If your contractors have made payments on account based on their liability for the previous tax year, it’s beneficial for them to complete their return before July as they may not need to pay the second payment on account in full or at all!
As the filing deadline approaches, it's harder for Accountants to ensure the return is prepared in sufficient time which usually means additional resources are required. Therefore it's common for Accountants to charge a higher fee as the deadline approaches so it may be advisable for your contractors, to sign up as soon as they can.
5. Reduced risk of errors
If your contractors complete their tax return close to the deadline, they may accidentally miss reporting on a key piece of information which will make their return incorrect. An incorrect return may also lead to penalties from HMRC so it's better for them to have their return completed earlier so they have sufficient time to review and confirm all the information is present and correct.
6. Contacting HMRC
HMRC have always been difficult to get through to in December/January due to the volume of additional queries that arise from individuals submitting their return late. Earlier in the year this process is usually much easier if there are any queries to raise.
7. Peace of mind
Finally, filing their tax return early gives your contractors an added peace of mind that another task that has been completed; especially if they expect to have an additional liability to pay.
Why use PayStream?
For many, long term tax planning, dealing with the HMRC or completing a Personal Tax Return sends individuals stress levels through the roof. So why not let our TAX Team help your contractors with bespoke tax advisory and compliance services.