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Running a successful business requires keeping up with numerous financial obligations, including taxes. To ensure that your business is in full compliance with tax regulations, it’s crucial to understand the tax deadlines and the penalties associated with missed payments or filing. This article will discuss the key dates and deadlines for self-assessment, VAT, corporation tax, and PAYE, as well as the penalties for non-compliance.
Self-Assessment: Self-assessment tax returns are typically filed by the self-employed, partners in a business, or those who receive income from sources other than their regular employment. The tax year runs from April 6th to April 5th the following year, with key deadlines as follows:
- Paper tax returns: Deadline is October 31st, following the end of the tax year.
- Online tax returns: Deadline is January 31st, following the end of the tax year.
- Payment: Due on January 31st, following the end of the tax year.
Penalties for late submission or payment include:
- An initial £100 penalty for missing the deadline.
- Additional daily penalties of £10 per day for up to 90 days after the initial penalty.
- A further penalty of 5% of the outstanding tax or £300, whichever is greater, for filing six months late.
- Another 5% penalty or £300, whichever is greater, for filing 12 months late.
Value Added Tax (VAT): Businesses with a taxable turnover exceeding the VAT threshold of £85,000 must register for VAT. VAT returns are usually filed quarterly, with deadlines as follows:
- Submission and payment: One month and seven days after the end of each VAT quarter.
Penalties for late submission or payment include:
- A 12-month penalty system, with surcharges ranging from 2% to 15% of the outstanding VAT, depending on the number of late submissions or payments within the 12-month period.
Corporation Tax: Corporation tax is levied on company profits. Key deadlines for corporation tax are as follows:
- Filing: 12 months after the end of the accounting period.
- Payment: Nine months and one day after the end of the accounting period.
Penalties for late filing include:
- £100 for filing one day late.
- An additional £100 for filing three months late.
- A tax-geared penalty of 10% of the unpaid tax for filing six months late.
- Another tax-geared penalty of 10% of the unpaid tax for filing 12 months late.
Pay As You Earn (PAYE): PAYE is the system through which employers deduct income tax and National Insurance contributions from employees’ wages. Key deadlines for PAYE include:
- Real-Time Information (RTI) reporting: On or before each payday.
- PAYE payment: 19th of the month following the tax month, or 22nd if paying electronically.
Penalties for late PAYE payments include:
- Penalties ranging from 1% to 4% of the late payment amount, depending on the number of late payments within a tax year.
- Additional penalties of 5% for payments more than six months late, and another 5% for payments more than 12 months late.
Understanding the key dates and deadlines for the UK tax system is essential for businesses to avoid penalties and maintain compliance. Keep in mind that this article offers general guidance, and specific circumstances may require additional considerations. If you need help with your tax comliance call our specialist tax advisors.