TTR Barnes

As a self-employed individual or a sole trader in the UK, it is your responsibility to meet the deadlines for submitting your self-assessment tax returns. Filing your self-assessment tax return and paying any liabilities due on time and accurately is crucial to avoid potential penalties, fines and interest charges from HMRC.  If you are a Director of a limited company you will usually also need to file a self-assessment return in addition to your Company tax return.

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KEY DATES YOU NEED TO KNOW

5^th April:  Tax Year End 

The UK tax year runs from the 6^th April in one year to the 5^th April of the following year (e.g. 6^th April 2022 – 5^th April 2023.)  You will need to keep records of your income and expenditure each year for this period for your tax return.

31^st January: Deadline for Filing your Self-assessment Tax Return

You will need to file your self-assessment tax return with HMRC by the first 31^st January that follows the end of your tax return period (e.g. if your tax year is 6^th April 2022 – 5^th April 2023 then you will need to file your return by 31^st January 2024.)  Within your tax return you will also need to calculate and submit any class 2 and class 4 National Insurance Contributions (NICs) for the same annual period.

31^st January: Deadline for Paying Any Tax Owed for your Self-assessment Tax Return

The deadline for paying any outstanding tax owed from your self-assessment is also 31^st January.   You will also need to pay the first Payment on Account towards your next tax return liabilities.

6^th July: P11D Return

If you provide taxable benefits to your Directors or employees you will need to submit an end-of-year report of those benefits to HMRC. You must submit your P11D return by 6th July and you will need to pay any Class1a NICs on work benefits you give to your employees by 22nd July.

31^st July: Payment On Account

A “Payment on Account” is HMRC’s way of encouraging individuals to spread out their tax liability payments throughout the year.  When you pay the taxes owed on your first self-assessment tax return (if the tax liabilities are £1,000 or more) then HMRC estimates your following year’s tax liabilities at the same figure and ask you to pay 50% of this sum, alongside your current year’s tax payment, with the remaining 50% to be paid in July.

For example:

• On 31^st January 2023 your first year’s tax liability due for tax year 6^th April 2021 – 5^th April 2022 is £2,500.
• HMRC will estimate that your tax liability for the year 6^th April 2022 – 5^th April 2023 (due on 31^st January 2024) will be same. You will need to pay £1,250 of this on 31^st January 2023 as your first Payment on Account with the following £1,250 Payment on Account to be paid by 31^st July 2023.
• On 31^st January 2024 any payments you make will take into account the £2,500 you’ve already paid. If there is additional tax to pay you will do this in the form of a Balancing Payment.  If there is less to pay then you may be due a rebate or could use this as part of your next Payment on Account.
• The cycle will then repeat, based on your latest tax submission.

Usually Quarterly:  VAT Return

VAT is a sales tax that is generated by businesses in their commercial dealings and then passed on to HMRC.  Usually businesses choose to file and pay their VAT returns on a quarterly basis, but you can opt to pay monthly or annually instead.

You can select the quarterly periods for which you would like to submit and pay your VAT returns.  These could be:

• December, March, June and September or
• January, April, July and October or
• February, May, August and November

You must complete your VAT return and make any payments within one month plus 7 days following the end of your VAT quarter.

For example, your latest quarterly VAT period is March 1^st – May 31^st.   You must submit returns and make any payments by July 7^th at the latest before incurring any penalties.

Usually Weekly or Monthly: PAYE (Pay As You Earn)

PAYE is a tax paid to HMRC by employees directly from their salary.  If you have paid employees in your business then you will need to calculate their PAYE, deduct it from their salary and pay it directly to HMRC as part of your payroll responsibilities.   You will also need to do the same for their NIC (National Insurance Contributions), as well as your own employer NICs (employer NICs are recorded as part of your tax return).

Depending on the type of contractors you engage you may also need to calculate and pay any CIS liabilities.

CIS, NI and PAYE are due to HMRC by 19th of the following month in which they apply (22nd if paid electronically).

Capital Gains Tax

Capital Gains Tax is a tax on the profit when you sell (or ‘dispose of’) something (an ‘asset’) that’s increased in value. CGT applies whenever your business has made a profit on any non-trading assets such as property or equipment.  It’s the gain you make that’s taxed, not the amount of money you receive.

Most capital gains are filed and paid for within your personal tax return.  Note that any gains on residential property sales must be paid and filed within 60 days of completion.

In conclusion there are various dates to remember for not only your self-assessment but also other taxes that may be applicable to you.  It is important that you keep on top of these to avoid any penalties and/or charges.  You could:

• Make calendar notes of your key returns
• Engage a qualified accountant or bookkeeper to support you

All information correct at time of going to print/live and on the best knowledge and understanding of the author at the time. This article is for general information only and does not constitute financial advice or recommendations for individual circumstances. No responsibility is taken for any actions taken on the base of the information within this article.