Crunch Accounting provide a back-to-basics guide to all the essential tax forms.
Bits of paper with unexplanatory names are the order of the day for a business owner. It can get complicated quickly and if you mess up you’ll have HMRC breathing down your neck. So, here’s a rundown of some of the tax forms you’re going to need and the purpose they serve.
The P11D form is how your business informs HMRC of the ‘benefits in kind’ bestowed upon employees. A typically unclear phrase what this means is the perks of the job, including things like interest free loans, private health insurance and company cars.
These perks essentially count as an increase in salary for the employee, so the amount of National Insurance Contributions needs to be upped as well. The forms only apply for employees earning over £8,500 a year, or for company directors who have a shareholding of more than 5%.
For those below that threshold, you’ll need a P9D instead.
The P45 is something many of us have had handed to us at some point in our lives. Given out to employees at the end of their employment, it’s not something anyone wants to receive out of the blue. So, what’s the point of it?
Well, the P45 details an employees tax contributions for the financial year so far. When they go to a new job, it’s important for the company to have this information to ensure they are put on the correct tax code.
The actual form is multipart. Part 1 is sent by the original employer to HMRC, while Part 1A is kept by the employee. Their new place of work takes Part 2, while they also send Part 3 to their tax office. Keep these responsibilties in mind when you take on staff.
This form is similar to the P45, except it doesn’t mean someone is leaving their position. What’s the same is the information, i.e. the amount of salary given by an employer and the tax paid by the employee.
It’s given to the employee at the end of the financial year and will be useful for them if they’re planning on trying to get a tax rebate. Bear in mind that as an employer you’ll need to send off P60s for the entire workforce, as part of your annual end of year filings.
If you’re running a Limited Company you’re going to be paying Corporation Tax on your profits. The CT600 form is there so you can do just that. This can be one of the more depressing forms you have to fill out.
It’s worth bearing in mind that you have to fill out this form online now, which should make it easier to deal with. You will need to file this form with your company accounts and with how you came to your final tax bill. Therefore it’s very important you get everything right.
If, for whatever reason, you don’t get your Self Assessment back to HMRC on time and they issue you with a fine, you might need a SA370. This is the form you’ll need to fill out in order to appeal against their decision.
Bear in mind though that you’ll need good reason. Just being a bit too lazy isn’t going to get you out of your punishment. You’ll need reasons like:
- A serious illness or disability that prevented you from completing your form (although HMRC are notably tough here)
- Your computer breaking while filling out your form online
- A HMRC error
- The Taxman failed to get your online activation code to you on time
Finding the Self Assessment system too difficult is not going to get you off and neither will saying your accountant was meant to do it.
Remember that if you’re going to send one of these off, make sure you’ve got your facts straight and you’re able to prove your claim.
Joshua Danton Boyd is a copywriter for the online accountants Crunch