As a business owner, tax affairs account for many of your most important responsibilities. You will certainly have to deal with HM Revenue and Customs, both to report your income and to pay your tax. Furthermore, depending on the legal structure of your business you may also need to deal with Companies House.
There are several important tax deadlines that you must take into account. They can be split into two categories.
Companies House deadlines
If your business is registered as a limited company or limited liability partnership, you will have to file an annual company accounts at Companies House. The deadlines for filing are strict, and you will incur financial penalties if you file late. There are very few valid excuses in the eyes of Companies House.
The deadline for filing you annual company accounts will depend on the company’s ‘Accounting Reference Date’ (ARD), and whether the company is private or public. If yours is a private company (that is, if shares in the company are not available for sale to the public), your company accounts must be filed with Companies House within 10 months of the Accounting Reference Date. If yours is a public company, accounts must be filed within 7 months of the ARD.
The Accounting Reference Date is initially determined by the company’s date of incorporation. However, you can change your company’s Accounting Reference Date by completing Form 225 and returning it to Companies House. You should remember, though, that you cannot change the ARD such that your accounting period would be longer than 18 months. Nor can you change the ARD more than once every five years.
The deadline for filing your first company accounts is different. If your first company accounts cover a period longer than 12 months, accounts must be filed within 22 months of incorporation if the company in question is private, and within 19 months if it is public - or within 3 months of the ARD, whichever is later.
If you miss the deadline you will receive an automatic fine. Private companies who file late but within three months of the deadline will receive a £100 fine, while public companies will be fined £500. The fine increases at three, six and 12 months.
Self Assessment deadlines
If you are a self assessment taxpayer you will have to complete an annual return for HM Revenue and Customs. There are several important dates during the course of each year by which you must send HMRC your return, and by which you must pay any tax you owe.
We have detailed the self assessment deadlines in chronological order.
- 31 October - If you received notice from HRMC on or before 31 July that you must complete a tax return, and you want to complete your return on paper rather than online, you must file it with HMRC by 31 October.
If you received notice from HMRX after 31 July, you must file your return within three months of the date of receipt.
If you meet this deadline, HMRC will calculate your tax liability, and will tell you how much you owe by 31 January. If you send a paper return after this date you will receive an automatic £100 fine.
30 December - If you complete your tax return online, owe less than £2,000 and wish for HMRC to collect tax through your tax code, you must file by 30 December. Remember, though, that it is often not possible for self employed people to pay tax through their tax code.
31 January - If you received notice to file from HMRC before 31 July and you wish to complete your return online, it must be filed by 31 January. If you miss this deadline you will receive an automatic £100 fine.
31 January is also the date by which you must pay your outstanding balance if you were asked to file a return by the previous 31 October. Interest will start to accrue on the outstanding balance if you miss this deadline.
Finally, 31 January is the date on which you may have to make a payment on account against your estimated bill for the current tax year. This helps to split your tax bill up over the course of the year.
28 February - If you have not paid what you owe by 31 January, the outstanding balance will attract an extra 5 per cent surcharge on 28 February.
31 July - If you still have not cleared the balance you owed on 31 January, the outstanding balance will attract a second 5 per cent surcharge on 31 July.
This is also the date on which you will be asked to make a second payment on account where applicable.
There are numerous HMRC and Companies House deadlines during the course of the year. You have a legal obligation to meet these deadlines, and failure to do so will result in severe financial penalties. If you do not fulfil your responsibilities your company may be struck off the register and, in the worst cases, HMRC will pursue legal action against you.
Many business owners choose to enlist the services of an accountant to help them deal with the numerous deadlines they face. If you are considering doing this you may wish to read our article on choosing the right accountant.