Navigating the complexities of HMRC tax regulations is a crucial responsibility for businesses operating in the UK. Understanding the various taxes administered by HMRC, including VAT, Income Tax, Corporation Tax, PAYE Tax, and the Construction Industry Scheme (CIS), is essential for compliance and effective financial management. This guide provides an overview of these key tax obligations to help business owners and individuals better understand their responsibilities and ensure they meet their tax obligations accurately and on time.
VAT (Value Added Tax)
Registering for VAT
Threshold: You must register if your VAT taxable turnover exceeds £90,000 in the preceding 12 months. (It is advised that if you expect to exceed this threshold in the next 30 days, you would need to register. However, you’d need to determine whether this is temporary or if it’s likely to be for the foreseeable future)
Process: Register online through the HMRC VAT portal, OR let us process it for you!
Submitting VAT Returns
Frequency: Usually quarterly, but you can opt for monthly.
Online Submission: Use your accounting software to submit VAT returns, unfortunately HMRC does not accept these submissions through their own website anymore (see MTD below).
Making Tax Digital (MTD): You must use compatible software to keep digital records and submit returns.
Payment
Methods: Direct Debit, online or telephone banking, or by credit or debit card (card charges apply).
HMRC Guidance link: https://www.gov.uk/register-for-vat
Self-Assessment Tax Return
Registering for Self-Assessment
Who Needs It: Sole traders, partners and directors in business, and individuals with additional income.
Process: Register online by creating a Government Gateway account OR let us process it for you!
Filing the Return
Deadline: 31 January for online returns and 31 October for paper returns (following the end of the tax year).
Process: Complete the return using your HMRC online account.
Payment
Deadline: 31 January for the balance of tax due and first payment on account; 31 July for the second payment on account.
Methods: Direct Debit, bank transfer, or credit/debit card (card charges apply).
HMRC Guidance link: https://www.gov.uk/register-for-self-assessment
Corporation Tax
Registering for Corporation Tax
Who Needs It: Limited companies, foreign companies with a UK branch or office, and unincorporated associations.
Process: Register online within three months of starting to do business OR let us process it for you!
Filing the Return
Form: Complete a Company Tax Return (CT600).
Deadline: 12 months after the end of the accounting period, however, payment is due 9 months and 1 day after the accounting period (very misleading we know!)
Online Submission: Use HMRC’s online services OR let us process it for you!
Payment
Deadline: 9 months and 1 day after the end of the accounting period.
Methods: Direct Debit, online or telephone banking, Bacs, or by credit/debit card (card charges apply).
HMRC Guidance link: https://www.gov.uk/corporation-tax
Payroll (PAYE - Pay As You Earn)
Setting Up PAYE
Who Needs It: Employers with employees.
Process: Register as an employer with HMRC before the first payday OR let us process it for you!
Running Payroll
Software: Use payroll software to record pay, calculate deductions, and report to HMRC.
Real Time Information (RTI): Send details to HMRC each time you pay employees.
Payment
Frequency: Monthly or quarterly.
Methods: Direct Debit, bank transfer, or Bacs.
HMRC Guidance link: https://www.gov.uk/register-employer
Construction Industry Scheme (CIS)
Registering for CIS
Who Needs It: Contractors and subcontractors in the construction industry.
Process: Register online through the HMRC CIS portal OR let us process it for you!
Filing Returns
Contractors: Must verify subcontractors and file monthly returns detailing payments.
Subcontractors: Verify your status and provide details to contractors.
Payment
Deductions: Contractors deduct money from subcontractor payments and pass it to HMRC.
Methods: Use standard methods for PAYE payments.
HMRC Guidance link: https://www.gov.uk/what-is-the-construction-industry-scheme
This guide offers an overview of the essential steps and processes. For more detailed information, you should visit the respective sections on the HMRC website.
Disclaimer - the thresholds and deadlines stated are relevant to most cases at time of writing, but there can be different scenarios and individual circumstances that may effect the standard guidelines. We recommend you source advice if you are unsure.
If you'd like to discuss how we can support you with the various TAX areas, simply click the button below and book a FREE no obligation, 30 min consultation.
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