The Tax Deadlines You Need To Be Aware Of
|Sole Trader||31/01 following end of trading year 5th April|
|Limited Company||Statutory Accounts: 9 months after the end of the first trading year.
CT600 (Corporation Tax Return): Filing 1year after first trading year. Payment due 9 months after the end of the first trading year.
Confirmation Statement: Due on the anniversary of incorporation. Annually.
|VAT||1 month and 7 days after the end of the VAT quarter.|
|PAYE||22nd of the following month.|
One of the biggest decisions you will have made when setting up your company is determining the correct business structure. Depending on your business structure, you will need to be aware of a differing range of tax deadlines you need to meet throughout the year.
For all accountants in Bristol and across the UK, these dates a hugely important.
Below we have put together the most important deadlines for sole traders, limited companies and VAT/PAYE registered entities.
Operating as a sole trader, or registering as self-employed, when you first set up your business is inexpensive, avoids a lot of red tape and is quick to set up. Once you have registered however, it is important to know that as a sole trader, you and your business will be taxed as one single entity. As a sole trader your profits are taxed the same way as any other income by HMRC, which also means that any debt is accountable to you personally.
The tax payable as a sole trader is based on accounts made up to the 5th April and is due on the 31st January. The importance of getting your reporting in before the deadline cannot be overemphasized, as the penalties faced for missing this deadline can be severe.
|Time after 31 January deadline||Penalty
|1 day||£100 penalty|
|3 months||£10 daily penalty for up to 90 days (maximum £900)|
|6 months||5% of tax due or £300 (whichever is greater)|
|12 months and later||5% of tax due or £300 (whichever is greater)|
The maximum penalty you may face can reach up to £1,600 per year.
If your business entity is turning over more than £85,000 annually you will need to register for VAT. If, for whatever reason, you have exceeded the £85,000 and have not registered for VAT, HMRC may back charge you for the amount over £85,000.
The VAT return is a quarterly tax return that, while crucial, is often time consuming, complicated and can cost the company dearly if submitted late. When you register, you’ll be sent a VAT registration certificate. As well as confirming your VAT number, this will also let you know you when you need to submit your first VAT return and payment along with your effective date of registration. The deadline for online filing will normally be one month and seven days after the end of your VAT accounting period.
You will need to make a VAT return every quarter depending on when you first registered. So, for example, if you registered on the 1st January the first return will be made up to the 31st March and will need to be submitted and paid by the 7th May (exactly one month and seven days after regardless of when you have registered).
There will be subsequent VAT returns up to the 30th June, 30th September, and the 31st December.
Most VAT registered businesses will also need to follow the rules for ‘Making Tax Digital’.
In order to make this as time efficient and painless a process as possible, we recommend getting a good accountant to keep you on top of your books and help you to stay on top of your financial obligations.
If you register as an employer, you will need to make PAYE and national insurance contributions. This return can be done monthly, or quarterly if you pay less than £1,500 per month and must be submitted and paid by the 22nd of the next tax month.
Late monthly and quarterly payments will result in daily interest that will continue to build up on all unpaid accounts from the due date to the date of payment.
Choosing to run your business as a Limited Company has many advantages to it, particularly In terms of its tax efficiency and limited liability, ensuring the security of your personal assets should your business go through hard times.
One of the key components of registering as a limited company is that your business is classed as a separate entity to you. Corporation tax needs to be paid on profits.
As the director of a Limited Company, you will have certain legal responsibilities including taking care of various forms and returns. Filing your confirmation statement (annual return) is a way for Companies House to confirm your company’s data and is not to be confused with your annual accounts. You must file a confirmation statement at least once per year and it can be done either online or by post.
Additionally, your limited company will need to file annual accounts with a deadline of 9 months after your company’s financial year ends.
The Corporation Tax Return (CT600) is a return filed with HMRC once a year, that includes details about your company’s income and is due 12 months after your first year end. This, paradoxically, needs to be paid 9 months before the years end.
Again, as with other business structures, the penalties for late returns or missed deadlines can be significant. Here at Lite Tax, we always err on the side of caution, and whether its helping you with your VAT returns, managing your payroll, or completing your bookkeeping, we aim to provide the best service for you and the financial health of your business.