Being self-employed or a small business owner can be complicated, especially when it comes to that time of year when you need to start thinking about the dreaded tax return. It can feel like a lot to remember but luckily, it’s been separated into different parts throughout the tax year, with different deadlines. So, these are the important dates that you need to keep in mind.
5th October – Register for self-assessment.
If you’re earning above the trading allowance and not being taxed through an employer (PAYE), then you need to register for a self-assessment. You can register through the GOV website. This deadline is for businesses and sole traders in their second tax year (from April 6th 2020 to April 5th 2021). If you’re unsure, there’s a tool (Check if you need to send a Self Assessment tax return – GOV.UK (www.gov.uk)) on the GOV website to help you figure out if you need to register. Not registering could lead to being fined.
31st October – Deadline for filing a paper tax return.
HMRC is encouraging those who are self-employed and business owners to complete their self-assessment online. However, if you received your notice to file after the 31st of July or if HMRC has specifically told you to file a paper return, it needs to be sent off before the 31st of October. It’s important to note that HMRC must receive the return by the deadline, therefore you need to leave yourself plenty of time to print out, fill in and send off the return.
30th December – Let HMRC know to collect payments through PAYE.
If you’re currently employed or receiving a company pension and you owe less than £3,000 in income tax from self-employment, HMRC can adjust your PAYE tax code and collect the tax you owe from your salary. This will be automatic if you submit your tax return before the 31st of December. However, if you prefer, you can opt-out of paying tax through your PAYE and pay directly to HMRC.
31st January – File your return online, pay your bill and first payment on account.
This is the deadline for filing your tax return online and paying your tax bill. To do this, you need a Government Gateway login and password; bear in mind that it takes 10 working days for your gateway code to arrive, so give yourself enough time to receive it. You will also need to make your first payment on account, which equates to 50% of your tax liability for the previous year. This payment will go towards your tax bill next year.
31st July – Second payment on account
This deadline is for your second payment on account. This payment will be similar to the first payment, equating to half of your tax bill from the previous year. If your earnings are the same as the previous year, then after this payment you would have already paid your self-assessment tax bill in full.
These dates are very important to remember as if you miss any deadlines, you might end up with late payment penalties from HMRC.
Have any questions about filing tax returns or paying tax as a self-employed business owner? We’re here to help. Contact Vicky today.
