For small business owners, staying on top of tax deadlines is essential to avoid penalties, maintain financial health, and ensure the smooth operation of their business. Tax deadlines can often feel overwhelming due to the number of forms, due dates, and specific obligations involved. However, with the right knowledge and preparation, these deadlines can be managed efficiently. This blog post will cover key tax deadlines for UK small businesses and provide guidance on how to prepare for them, reducing stress and ensuring compliance.
1. Self-Assessment Tax Returns
Small business owners, especially sole traders, must submit their Self-Assessment tax returns each year. This form reports your income, expenses, and any other earnings to HMRC.
Key Deadlines:
- 31st October (Paper Returns): If you’re filing your Self-Assessment on paper, the deadline is 31st October following the end of the tax year.
- 31st January (Online Returns): The most common method is online submission, and this deadline falls on 31st January.
- 31st January (Payment Deadline): The same day as the online submission deadline, you must also pay any tax you owe for the previous tax year.
How to Prepare:
- Keep detailed records: Ensure that you maintain accurate records of your business income and allowable expenses throughout the year.
- Plan for payments: Set aside money throughout the year to cover your tax liability. Consider using budgeting software or a dedicated savings account for taxes.
- Register for Self-Assessment early: If you’re filing for the first time, make sure you register with HMRC well before the deadline to avoid delays.
2. PAYE (Pay As You Earn) Deadlines
If your business has employees, you’ll need to manage PAYE (Pay As You Earn), which is the system used by HMRC to collect Income Tax and National Insurance from employee wages.
Key Deadlines:
- Monthly PAYE submission: PAYE must be reported to HMRC each month on or before the employees’ payday.
- 22nd of each month: If you pay electronically, you have until the 22nd of each month to submit your payment to HMRC.
- 19th of each month: For non-electronic payments, the deadline is the 19th of the month following the tax period.
How to Prepare:
- Use payroll software: Many small businesses use payroll software to manage and automate PAYE submissions, ensuring they meet deadlines.
- Stay organised: Ensure you calculate the correct amounts for PAYE and National Insurance contributions and keep track of all deductions made for employees.
- Outsource payroll: If managing payroll becomes too complex, consider outsourcing to a professional payroll service to avoid errors and late submissions.
3. Corporation Tax Returns
If your business is a limited company, you must submit a Corporation Tax return and pay any tax owed to HMRC. Corporation Tax is a percentage of your business’s profits, and there are specific deadlines you need to meet.
Key Deadlines:
- 9 months and 1 day after your accounting period: Your Corporation Tax payment is due within 9 months and 1 day of the end of your accounting period. For example, if your accounting period ends on 31st March, the payment is due by 1st January the following year.
- 12 months after your accounting period: Your Company Tax Return (CT600) must be filed within 12 months of the end of your accounting period.
How to Prepare:
- Track your profits: Maintain accurate records of your company’s earnings and allowable expenses throughout the financial year.
- Work with an accountant: Consider hiring an accountant to ensure your Corporation Tax calculations are accurate and your tax return is filed correctly.
- File early: Although you have 12 months to file your return, it’s advisable to submit it well before the deadline to avoid any last-minute stress.
4. VAT Returns
If your business is registered for VAT, you’ll need to submit regular VAT returns to HMRC. VAT returns report how much VAT you’ve charged on sales and how much VAT you’ve paid on purchases.
Key Deadlines:
- Quarterly returns: Most businesses file VAT returns quarterly, and you must submit your VAT return and payment within one calendar month and seven days after the end of the VAT period.
- Annual accounting scheme: Some businesses can apply for an annual accounting scheme, which allows them to make nine monthly or three quarterly interim payments, with a final payment due at the end of the year.
How to Prepare:
- Use VAT accounting software: Many businesses use software to track VAT-registered transactions, simplifying the process of filing returns.
- Stay compliant with MTD: Ensure that you comply with Making Tax Digital (MTD) regulations, which require VAT-registered businesses to maintain digital records and submit returns through compatible software.
- Set aside funds for VAT: Ensure you regularly set aside funds to cover your VAT liability, so you aren’t caught short when the payment is due.
5. End of Year Deadlines
The end of the financial year brings several additional deadlines for small businesses, especially for those managing payroll, expenses, and employee benefits.
Key Deadlines:
- 31st May: You must issue a P60 form to each employee by 31st May, summarising their total pay and deductions for the tax year.
- 6th July: If you provide benefits to employees (such as company cars or private health insurance), you need to submit your P11D and P11D(b) forms to HMRC by 6th July.
- 6th April: This marks the start of the new tax year, and your payroll systems must be updated to reflect new tax codes and rates.
How to Prepare:
- Ensure payroll is up to date: Make sure that your payroll software reflects any changes in tax rates, student loan thresholds, or National Insurance contributions for the new tax year.
- Submit benefit forms: If your business provides any benefits, ensure that you file the appropriate forms (P11D, P11D(b)) on time to avoid penalties.
6. Payments on Account
For those who pay tax through Self-Assessment, HMRC may ask you to make Payments on Account. These are advance payments towards your tax bill, based on your previous year’s tax liability.
Key Deadlines:
- 31st January: The first payment on account is due alongside your Self-Assessment tax bill.
- 31st July: The second payment on account is due by 31st July.
How to Prepare:
- Understand your liability: Payments on Account are based on your previous year’s tax bill, so if your earnings are significantly different, you can apply to reduce these payments.
- Budget for payments: Plan for these payments throughout the year to avoid cash flow issues when the deadlines arrive.
Stay Ahead with Preparation
Understanding and preparing for tax deadlines is crucial for small business owners to avoid penalties, maintain good standing with HMRC, and keep operations running smoothly. The key to managing these deadlines is preparation, organisation, and, when necessary, seeking professional advice.
By maintaining accurate financial records, using accounting software, and working closely with a qualified accountant, you can ensure that you meet all your tax obligations on time. Proactive planning will not only prevent the stress of last-minute tax filings but also help you optimise your financial strategy for future growth.
Make it a priority to stay informed about changes in tax regulations and deadlines to keep your business on track year after year.
