5 reasons to update your self-assessment throughout the year

Self-assessment tax returns are one of the many things people don’t like to do and often leave it until the last minute. However, there is a better solution than ignoring it: update your finances throughout the year and save yourself the panic of doing it last minute.

Here we discover 5 reasons why submitting as you go is a clever move.

1. Help mental health

Staying on top of your tax allows you to be in full control of your finances.

You are able to manage your income and outgoings by inputting data into your record as you become aware of them. Doing this will give you heaps of confidence, help you feel empowered and this will also save you from any nasty tax shocks, feeling anxious and help prevent sleepless nights.

2. Saving

If you’re aware of your financial situation throughout the year, you’ll be able to make sure there’s enough money to make any tax payments owed. This includes the payment on account, which a lot of taxpayers often forget about until these payments are requested 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. Correct tax calculations = correct tax payments

The chances of not putting enough money aside to pay any tax owed become more likely if the tax owed isn’t calculated properly and this if more than likely to happen if you rush the self-assessment process. You might type in the wrong figure, forget to include specific information, or neglect to offset your expenses.

It can be incredibly stressful when both under- or- over-paying your tax payment. Updating your self-assessment throughout the year means you can sidestep HMRC penalising you or the wait for a refund. You’ll be able to ensure all the data entered is correct, and claim your expenses as you make them – even from your smartphone.

4. Avoiding penalties

It’s not just underpaying tax that HMRC may hit you with a penalty for. You may also receive a penalty if you don’t submit your tax return on time.

Having to input all the information for an entire tax year can take up a lot of time. Not being able to complete your self-assessment by the deadline becomes more probable the closer to the wire you get. Keeping your tax return up-to-date as your go will ensure that you can file far ahead of its due date, avoiding penalty points and payments.

5. Prepare for Making Tax Digital

Submitting your information on a regular basis is a lot easier if you do it digitally. Making Tax Digital for VAT has already come into force, and in due course, this will be extended to income tax. HMRC have indicated there may be a delay due to Brexit. BUT being ready is key and you will be able to 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.

About GoSimpleTax

Easy-to-use software like GoSimpleTax will come in handy. The tax owed is automatically adjusted to reflect any additional data, providing you with a full picture of your financial affairs in real-time. As well as this, tax-savings recommendations are offered where relevant, so you can lower your liability.

You can try the majority of our features by signing up to our software, it’s free for 14 days and no credit card is required – until you decide to buy!