During this period of immense uncertainty your annual income tax return for the 2019 tax year will probably be one of the furthest things from your mind.
There are numerous reasons to prepare/file your tax return early under normal circumstances and indeed a couple of these reasons become even more important during this unprecedented COVID-19 crisis.
1. Trigger a much-needed refund
Why wait to receive your tax refund? Once you file your tax return, your refund should be processed soon after.
Under or over payments of tax can often arise on employees or directors, where Revenue has made errors with their tax credits. Building subcontractors which have had tax deducted at source through Relevant Contracts Tax are often in a tax refund position.
What better way to give your cash resources a boost than to reclaim a refund from Revenue.
2. Finalise your liability for cashflow planning
Most businesses are now in the process of trying to forecast their cash needs in the short/medium term and one of the biggest expenses that the self employed will have before the end of the year will be their income tax bill.
Knowing exactly what your liability will be in October will allow you to plan effectively for how you will be able to pay it, be that through bank funding or else preparing to engage with Revenue and asking for a phased payment arrangement when the liability falls due.
Remember just because you file your return early does not mean that you have to pay the liability immediately. That only becomes due for payment in October.
3. Have more time in the autumn to focus on your business
Whilst Revenue are looking at granting payment deferrals during the COVID-19 crisis they are advising all businesses to file their tax returns as normal.
This includes your annual income tax return.
If business is quieter for you at the moment your income tax return is a job that you could get done and out of the way now. When October comes around hopefully business will be back to normal and you will have the time to focus on getting your business back on track rather than on your income tax returns.
TaxAssist Accountants can assist you with preparing your 2019 tax return including helping you to claim any outstanding refunds due or helping you to plan for payment of the 2019 tax liability in October.
Last updated: 6th April 2020This article is intended to inform rather than advise and is based on legislation and practice at the time. Taxpayer’s circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this article, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.