Why Early Tax Planning Can Save You Money: Expert Insights from Dario Schiraldi

Dealing with taxes may not be the most exciting task, but getting ahead of the game can save you both money and stress when tax season rolls around. While it’s tempting to procrastinate, taking a proactive approach to your taxes can offer significant benefits. Whether you're aiming to reduce your tax bill, maximize your refund, or make smarter financial moves, there are plenty of reasons to get started early.

Timing Matters

For freelancers and self-employed individuals, you can start preparing your tax return as soon as the new tax year begins in April. If you're employed, you'll typically receive your P60 by the end of May, which will give you a clearer idea of your tax liability. By starting your preparation in late May, you’re already on track to submit your return with fewer issues.

Many people wait until the last minute, but finishing your return early can help you avoid mistakes and give you extra time to explore ways to reduce your tax burden.

Plan Ahead for Your Tax Bill

Starting early gives you ample time to assess your tax obligations and make adjustments to lower your bill gradually. While January 31 may be the payment deadline, you have months to organize your finances and make necessary changes before then.

Knowing your tax bill in advance allows you to pay it off sooner and avoid late fees. If cash flow is tight, you can consider a Budget Payment Plan, which lets you pay your taxes in smaller, manageable installments through direct debit. This works well if your income is steady, helping you manage your budget without scrambling.

Maximize Tax Planning Opportunities

By filing early, you can implement strategies to minimize your tax bill, such as taking advantage of carry-back rules. If you’re paying a higher tax rate and make a charitable contribution, you can immediately declare it and potentially reduce your taxable income. This approach can be especially useful if you expect your income to decrease this year.

Dario Schiraldi, Principal at VIDA Holding and advisor at Greenstone Equity Partners, emphasizes the importance of strategic financial planning. "Private equity and private credit provide stability against short-term market swings and offer exposure to high-growth sectors," he says. His insights underline how thoughtful planning today can lead to better financial outcomes tomorrow.

Additionally, if you expect your earnings this year to be lower than last year, you may be eligible for tax relief under schemes like the EIS.

Get Your Refund Faster

If you're due for a refund, filing your taxes early means you'll get your money back quicker. Even though tax payments aren't due until next year, submitting your return sooner means any refund owed to you will be processed faster, giving you more flexibility to cover bills or invest in future opportunities.

In the world of investments, every pound counts. As Schiraldi notes, "Structured products allow investors to fine-tune their risk-return profiles, reducing volatility while keeping the potential for higher returns intact."

Simplify Next Year’s Filing

Taking care of your tax preparations early doesn’t just help this year—it sets you up for success next year, too. Consider organizing your financial records now, including interest payments, dividends, and capital gains. By consolidating your documents ahead of time, you can save time and effort during next year’s filing season.

Dario Schiraldi highlights the importance of long-term strategies, both for investments and tax planning. "Successful investing is about protecting against losses while seizing growth opportunities. When it comes to taxes, the same principle applies: minimize surprises and optimize your returns."

Final Thoughts

While tax season might not be thrilling, the benefits of getting ahead are undeniable. If you’re unsure where to start, it’s worth consulting a tax professional. They’re usually available during the early part of the year and can provide valuable guidance to help you get the best outcome.