Running a business can be challenging, and one aspect that often induces stress among business owners is taxation. However, fear not! This simple guide aims to provide a clear overview of important dates and essential information for SMEs in the UK, covering Corporation Tax, VAT, PAYE, and Personal Tax Returns.
Corporation Tax
Who Pays?
Limited companies and foreign companies with a UK branch or office are required to pay Corporation Tax.
What are You Charged On?
Taxable profits include trading profits, investments, and gains from selling assets for more than their cost.
Deadlines
The tax return submission deadline is 12 months after the accounting period concludes, while the Corporation Tax payment is due nine months and one day later. It's paramount to meet these deadlines to avoid penalties.
VAT
Who Must Register?
Businesses must register for VAT if their taxable turnover for the last 12 months exceeds £85,000.
Penalties for Late Registration
Late registrants must pay VAT on sales made since the missed registration date, and penalties may apply depending on how much you owe and how late your registration is.
VAT Deadlines
VAT returns must be submitted within one month and seven days after the accounting period concludes (this could be monthly, quarterly or annually depending on your scheme). Accumulating penalty points for late submissions may lead to a £200 penalty, with subsequent late submissions incurring an additional £200 penalty each.
PAYE
Deadlines
PAYE is due to HM Revenue and Customs (HMRC) by the 22nd of the next tax month for monthly payments or the 22nd after the quarter's end for quarterly payments. Opting for quarterly payments is viable for businesses expecting average monthly payments below £1,500.
Personal Tax Returns
Who Has to File?
Self-employed individuals, partners of a business partnership, those with a taxable income exceeding £150,000, receiving dividends or individuals subject to Capital Gains Tax or the High-Income Child Benefit Charge must submit a tax return.
Deadlines
For paper returns, the deadline is midnight on October 31, whereas, online returns must be submitted by midnight on January 31 – Make sure to get your records to us by October 31st to avoid any additional fees.
Penalties for Late Returns
Late filing attracts a £100 penalty up to three months overdue, with additional charges for later submissions or delayed tax bill payments.
In the midst of managing your company's taxes, don't forget about your personal tax return! Staying informed and meeting deadlines will help ensure a smooth and penalty-free tax season for your business and personal finances alike.
If you find yourself wanting more information after reading this article, please don't hesitate to reach out. Whether you have questions, require additional details, or seek clarification on any topic covered, we welcome your inquiries. Our team is here to assist and provide the information you need.