Staying on top of the key tax deadlines

Keeping on top of deadlines is always a struggle, and when it comes to tax there are financial penalties for non-compliance. Missing a deadline not only means penalties and interest, but it gives HM Revenue & Customs (HMRC) an excuse to trawl through your affairs. Here are the key dates for your diary. Individuals | VAT | Employers | Companies

Individuals

January 31st - Deadline for tax returns for the tax year ended on the preceding 5 April. There is a £100 penalty if the return is not filed by this date - in the case of partnership returns, each partner is charged £100 Payment must be made from any balancing payment from the previous tax year covering the balance of:

• Income tax
• Class 4 National Insurance Contributions (NIC)
• Capital gains tax

It is the first income tax and Class 4 NIC payment on account for the current tax year. If any of this tax is paid late, the Revenue will charge interest on the unpaid amount. Provided the return for the previous tax year was filed by 31 January, HMRC needs to notify its intention to enquire into the return by the following 31 January, unless it subsequently makes a discovery assessment. This is also the deadline by which you need to make any amendments to the last return submitted. February 28th - If there is any outstanding unpaid balance for the previous tax year, HMRC will issue a 5% surcharge on the unpaid amount. Interest will continue to accrue. April 6th - The new tax year starts July 31st - The second payment on account of the income tax and Class 4 NIC liability for the tax year just ended is due. Interest will run on any unpaid amounts as on this date. If any of the balancing tax payment that was due on 31 January remains unpaid a a second 5% surcharge will be imposed by HMRC and interest will continue to accrue. If the return that was due to be submitted on 31 January is not submitted by 31 July, a second fixed penalty of £100 is imposed (£100 per partner for late partnership returns). September 30th - If you would like the HMRC to calculate your tax liability for the previous tax year, you will need to have submitted your tax return. October 5th - Date to notify HMRC of your liability to pay tax if you have not been issued a tax return for the previous tax year. The maximum penalty for missing this deadline is the balance of the tax that is outstanding as at the coming 31 January. December 29th - You must submit your return electronically via the electronic lodgement service by this date if you have a balancing payment of less than £2,000 and wish to have your tax collected through next year’s PAYE tax code. 30th - As above, if you are filing your form via the Internet.

VAT

A business needs to register within 30 days for VAT if its taxable supplies at the end of the month in the year then ending exceed the threshold, or at any time if it is expected that taxable supplies will exceed the threshold in the next 30 days. The penalty for late registration is a percentage of the VAT due (or £50 if greater). The rate of the penalty is:

• 5% where registration is up to nine months late
• 10% if nine to 18 months late
• 15% if over 18 months late.

VAT returns need to be submitted to HMRC by the end of the month following the quarterly return period. Any VAT due must also be paid by this date (a seven-day extension for return submission and payment is given for businesses that pay electronically). A default penalty surcharge system applies if the VAT return is filed late or VAT is not paid on time. Where all VAT is paid on time, but the return is submitted late, there is no surcharge, but HMRC will record the default. The penalty is the greater of £30 or the following percentages of outstanding VAT: 1st default in surcharge period 2%; 2nd default in surcharge period 5%; 3rd default in surcharge period 10%; 4th default in surcharge period 15%; 5th default in surcharge period 15%; and further defaults 15%

Employers

There are a number of compliance deadlines that are relevant to employers: April All PAYE income tax and NIC for the tax year ended on the preceding 5 April need to be paid by 19 April otherwise interest will begin to accrue on the unpaid tax. Large employers (those with 250 or more employees) need to make monthly electronic payments by 19th of the month in which each period ends. A system of automatic surcharges applies if payments are persistently not made in full by the due dates. Employers whose average PAYE and NIC liability is less than £1,500 can opt to pay quarterly instead. Payments need to be made by 19th of the month in which the relevant period ends (22nd of the month for quarterly payments made electronically). The quarterly payments are due in July, October, January and April. May Employers need to submit forms P14, P35, P38 and P38A return for the year ended 5 April, by the following 19 May. Failure to do so will result in penalties as follows: (a) a penalty equal to the monthly amount for each (part) month the delay continues, up to 12 months, and (b) a penalty of up to the amount of PAYE or NIC payable which was unpaid as at 19 April following the tax year. The monthly amount is £100 for every 50 employees (apportioned for any part). Employers need to issue forms P60 to all their employees by 31 May. July Employers need to submit forms P11D, P11D(b) and P9D for the year ended 5 April to HMRC by 6 July. Copies of the forms P11D and P9D need to be issued to their employees. A penalty of £300 per form is imposed if these are filed late, with a further charge of up to £60 per form per day for any continued delay. The 6 July is also the deadline by which relevant third parties need to give information on benefits and/or expenses that they have provided to employees. Employers also need to inform HMRC of any termination payments made in excess of £30,000 and provide details of all share schemes by this date. PAYE settlement agreements (PSAs) must be finalised by 6 July following the tax year. The deadline by which employers need to pay all Class 1A NICs in respect of benefits in kind provided to their employees is 19 July following the tax year. October Any income tax and Class 1B NICs payable in respect of a PAYE settlement agreement is due by 19 October following the tax year to which the PSA relates. Employers must inform HMRC of any changes in the car and fuel benefits received by their employees by submitting a form P46(car) by 2nd of the month following the quarter periods ending on@ 5 November, 5 February, 5 May and 5 August.

Companies

Just like individuals, companies have to comply with a number of self-assessment deadlines. However, these deadlines depend on when the company’s financial year-end is. The main ones are as follows: The due date for small companies to pay corporation tax is nine months and one day following the end of the company’s financial year. Small companies are those with profits below £1.5 million (lower if associated companies need to be taken into account). Large companies are required to make equal quarterly payments of corporation tax on the 14th day of the 7, 10, 13 and 16 month following the start of their financial year, based on an estimated corporation tax liability equal to that for the previous financial year. Companies need to submit corporation tax self-assessment return forms CT600 within 12 months following the end of the financial year.

• Late returns incur a penalty of £100 if they are submitted within three months of the filing deadline
• A further £100 penalty is incurred if the return is submitted later (penalties are raised to £500 and then £1,000 for a third consecutive offence)
• Tax geared penalties are imposed if the return is not submitted within 18 months from the end of the return period.

If a company is chargeable to tax and no return has been issued, it needs to notify HMRC within 12 months of the end of the financial year. Otherwise, a penalty equal to 100% of any tax unpaid 12 months after the end of the financial year will be incurred. HMRC can enquire into a return within 12 months of the filing date and the company can amend its return within the same period. Companies’ CT61 quarter periods end on 31 December, 31 March, 30 June and 30 September for which any income tax due is payable by the 14th of the month following the end of the period. The corporation tax financial year ends on 31 March.