Tax Return Deadlines
This time of year tax payers start to frantically gather their information in order to complete their tax return. The online deadline for filing tax papers is 31st January 2014 however for paper tax returns the final deadline is 31st October 2013 therefore it is always a good idea to organise the necessary paperwork well in advance to ensure all information is available.
Keeping up to date records facilitates a timely completion of the tax return, which not only saves you from getting charged penalties but more importantly, means that a full tax liability can be calculated which gives you more time to plan your payment schedule and gives you control over your tax matters.
Up-to-date records not only allows you to plan regarding your tax payments but it also gives you a good indication of profitability and cash position of your business which in today’s economic circumstances is essential for the growth of your business.
In this article we examine;
· Finding out the deadline that applies to you
· Filing deadlines for tax returns
· How to file your tax return
· When you must pay your tax
The Tax Year and Your Business' Accounting Record the tax year runs from 6 April to the following 5 April. Therefore, we are currently in the tax year ended 5 April 2013- which you may also seen written as 2013/14.
As a business, you can have any year end you like whether it is a sole trade or a partnership however in order to benefit from cashflow advantages available to your business with regards to your tax liability, it might be worth discussing what year end to have with an accountant.
The year end will determine which tax year applies to your business. So for instance, if your business has a year end of 30 September then your last set of accounts will have been drawn up to 30 September 2013. This set of accounts falls between 6 April 2012 and 5 April 2013 and so will fall into the 2013/14 tax year.
Choosing a year end could be based on different things that benefit your business for instance if your business is seasonal, you should choose a quiet time so that collecting all the relevant information and paperwork is relatively easier with minimum hassle.
The Tax Return Deadline: Once you have established the tax year that applies, you can decide when your return must be filed. There are two methods of filing a tax return which have differing deadlines;
Paper – A hard copy of your tax return can be submitted but you must do so by midnight on 31 October following the tax year end. In our example above where the business has a year end of 30 September 2013, the paper tax return would have to be filed by 31 October 2012. You will receive the tax return documents from HM Revenue & Customs however if you have not received the documents or you misplace it, then you can always download the documents from HMRC’s website.
Online – Alternatively, tax returns can be submitted online if you chose to do so. This will give you an extra three months compared to the paper tax submission and the deadline for this is 31 January following the tax year end. In our example above, if you chose to do your tax return online, you will have to do so by 31 January 2014.
In certain unusual circumstances, you can register to file your return online if you have missed the October deadline. If you miss the January deadline to file your tax returns, an automatic fine of £100 will be issued by HM Revenue & Customs. Please not that there are no exceptions to this fine being issued. If you miss the deadline you will be issued a fine regardless of your tax liability and any other factors.
Please note that it is strongly advised to pay off your fines as soon as possible you will incur further charges if the return is over three months late. The HM Revenue & Customs have also increased these penalties as well.
Any tax liability arising must be paid by 31 January following the tax year end. In our example above where the year end is 30 September 2013, the tax liability has to be paid off by 31 January 2014.
Payments on Account (POA)
If your tax liability is over £1000 and less than 80% has been collected at the source (such as via PAYE), then you will have to contribute towards your tax bill for the next year as well. This must be done on 31 January and 31 July following the tax year end. Each payment is half of the tax due to for the previous year. The main objective of Payments on account (POA) is to ease the cashflow burden on tax payers by spreading the tax liability, although in your first year you could end up paying 150% of your tax liability. After the first year, the payments should become more consistent depending on the profitability of the business. It is highly recommended that you seek advice of a tax professional to help with your cashflow.
HM Revenue & Customs will charge interest on late payments:
You can make payments to HMRC via:
· Direct Debit
· Debit/Credit card over the internet (Bill Pay)
· Internet or telephone banking
· Bank Giro
· The Post Office
· Post
When making a payment to HM Revenue & Customs, you must include your Self Assessment number or Unique Taxpayer’s Reference (UTR), so the HMRC can allocate the payment to your record.
Small business owners who are still in the process of organising their receipts and other documents should seek the advice of a specialist tax accountancy service. This ensures that the tax affairs of the business are in order and allows the owner to operate safe in the knowledge that they have no outstanding tax debts.
This time of year tax payers start to frantically gather their information in order to complete their tax return. The online deadline for filing tax papers is 31st January 2014 however for paper tax returns the final deadline is 31st October 2013 therefore it is always a good idea to organise the necessary paperwork well in advance to ensure all information is available.
Keeping up to date records facilitates a timely completion of the tax return, which not only saves you from getting charged penalties but more importantly, means that a full tax liability can be calculated which gives you more time to plan your payment schedule and gives you control over your tax matters.
Up-to-date records not only allows you to plan regarding your tax payments but it also gives you a good indication of profitability and cash position of your business which in today’s economic circumstances is essential for the growth of your business.
In this article we examine;
· Finding out the deadline that applies to you
· Filing deadlines for tax returns
· How to file your tax return
· When you must pay your tax
The Tax Year and Your Business' Accounting Record the tax year runs from 6 April to the following 5 April. Therefore, we are currently in the tax year ended 5 April 2013- which you may also seen written as 2013/14.
As a business, you can have any year end you like whether it is a sole trade or a partnership however in order to benefit from cashflow advantages available to your business with regards to your tax liability, it might be worth discussing what year end to have with an accountant.
The year end will determine which tax year applies to your business. So for instance, if your business has a year end of 30 September then your last set of accounts will have been drawn up to 30 September 2013. This set of accounts falls between 6 April 2012 and 5 April 2013 and so will fall into the 2013/14 tax year.
Choosing a year end could be based on different things that benefit your business for instance if your business is seasonal, you should choose a quiet time so that collecting all the relevant information and paperwork is relatively easier with minimum hassle.
The Tax Return Deadline: Once you have established the tax year that applies, you can decide when your return must be filed. There are two methods of filing a tax return which have differing deadlines;
Paper – A hard copy of your tax return can be submitted but you must do so by midnight on 31 October following the tax year end. In our example above where the business has a year end of 30 September 2013, the paper tax return would have to be filed by 31 October 2012. You will receive the tax return documents from HM Revenue & Customs however if you have not received the documents or you misplace it, then you can always download the documents from HMRC’s website.
Online – Alternatively, tax returns can be submitted online if you chose to do so. This will give you an extra three months compared to the paper tax submission and the deadline for this is 31 January following the tax year end. In our example above, if you chose to do your tax return online, you will have to do so by 31 January 2014.
In certain unusual circumstances, you can register to file your return online if you have missed the October deadline. If you miss the January deadline to file your tax returns, an automatic fine of £100 will be issued by HM Revenue & Customs. Please not that there are no exceptions to this fine being issued. If you miss the deadline you will be issued a fine regardless of your tax liability and any other factors.
Please note that it is strongly advised to pay off your fines as soon as possible you will incur further charges if the return is over three months late. The HM Revenue & Customs have also increased these penalties as well.
Any tax liability arising must be paid by 31 January following the tax year end. In our example above where the year end is 30 September 2013, the tax liability has to be paid off by 31 January 2014.
Payments on Account (POA)
If your tax liability is over £1000 and less than 80% has been collected at the source (such as via PAYE), then you will have to contribute towards your tax bill for the next year as well. This must be done on 31 January and 31 July following the tax year end. Each payment is half of the tax due to for the previous year. The main objective of Payments on account (POA) is to ease the cashflow burden on tax payers by spreading the tax liability, although in your first year you could end up paying 150% of your tax liability. After the first year, the payments should become more consistent depending on the profitability of the business. It is highly recommended that you seek advice of a tax professional to help with your cashflow.
HM Revenue & Customs will charge interest on late payments:
You can make payments to HMRC via:
· Direct Debit
· Debit/Credit card over the internet (Bill Pay)
· Internet or telephone banking
· Bank Giro
· The Post Office
· Post
When making a payment to HM Revenue & Customs, you must include your Self Assessment number or Unique Taxpayer’s Reference (UTR), so the HMRC can allocate the payment to your record.
Small business owners who are still in the process of organising their receipts and other documents should seek the advice of a specialist tax accountancy service. This ensures that the tax affairs of the business are in order and allows the owner to operate safe in the knowledge that they have no outstanding tax debts.