After Christmas there are only about 10 weeks of work before the deadline to file tax returns.
If you don’t get your tax return in by 31 March, Inland Revenue has an extra year in which to examine your return. Also, you could lose your right to an extension of time for filing the return.
Late tax returns have a number of other disadvantages:
- Provisional tax has to be paid based on the year before last +10%. At times, this figure could be too high.
- If you get your accounts done late, it might not be practical to get them completed by 31 March. Reasons could be:
- sickness or staff leaving
- too many other people have left their accounting too late – overload.
- You can become liable for Inland Revenue interest without realising it. The longer this is left the bigger the bill from Inland Revenue. The interest rate is shortly going up to 10.39%.
- If there is an opportunity to save tax it’s better to know about it early and take full advantage of it. Sometimes opportunities reveal themselves when the financial statements are prepared.
