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Might a budget payment plan help your self assessment clients?


Published: 25 May 2022 Update History

HMRC is promoting the benefits of early filing of tax returns including the budget payment plan.
There still seems to be a fairly common misunderstanding among taxpayers that filing their self assessment tax return early means earlier payment. Does this apply to your clients?

As ICAEW members will appreciate, filing early can help with financial planning. Filing the 2021/22 return before the end of July 2022 means that the second payment on account due at the end of July will reflect the actual liability for that tax year.

Filing early gives advance warning of the amount to be paid in January 2023 and opens up the possibility of using a budget payment plan to spread the payments.

In many cases, it will take time to assemble all the information needed for the return. However, more than 66,000 taxpayers filed their 2021/22 return on 6 April 2022. This does not quite reach the peak of the more than 96,000 who filed on 6 April 2020 at the start of the COVID-19 pandemic.

2021/22 tax returns will need to include taxable COVID-19 support grants received in that tax year, including the fourth and fifth self-employment income support scheme grants.

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