Any business must have a clear understanding of the financial tax year in the UK. What it means and why it matters, as well as the important tax year dates you need to know. We have covered it all in our guide to tax year dates and deadlines at Portman Asset Finance. We have compiled all the vital information you need to know to stay on top of your deadlines and how to spread the cost of your corporation tax bill using expert finance services.
This article covers:
- What Is a Tax Year?
- Tax Year Dates In The UK
- Self-Assessment Deadlines
- Corporation Tax Deadlines
- VAT Deadlines
What Is a Tax Year?
The UK tax year starts April 5th and runs to the following April 6th. To understand the UK tax year, you need to know about the financial or fiscal year. This is the period of time specified in government accounting, which is used to set out the country’s budget. In the UK, the financial year does not run the same as the traditional calendar year.
Taxation laws are in place to maintain accounting records by individuals and businesses to ensure all taxes are calculated and assessed in line with the government’s financial year.
Tax Year Dates In The UK
You need to be aware of the key tax dates in the UK, which can be found on the government website. However, we have compiled an easy-to-understand overview of the tax year dates you need to know.
- 6th April: The start of the new tax year. This is when your new allowance officially starts.
- 31st October: The deadline for filing paper tax returns.
- 31st January: The deadline for filing tax returns online and paying any tax due.
- 5th April: The end of the tax year.
Why Does the UK Tax Year Start on April 6th?
If you’re wondering why the tax year start date is so random, you’re not the only one. In fact, many other countries start their tax year on the same day as the new calendar year, January 1st, but not the UK.
This decision dates back centuries when we switched from the Julian to the Georgian calendar. Making this switch meant we lost 11 days, so we moved our previous tax year date (the previous New Year’s Day) from March 25th to April 6th, and it has been this way ever since.
In the future, the government may decide to change this date to align with New Year’s, but for now, we must remember this crucial date.
If you are self-employed, a sole trader or registering a partner or partnership, you must complete self-assessment tax returns. Here are the key dates you must remember for individuals:
- 5th October: Register for Self Assessment. You can check if you need to send a Self Assessment tax return using the government’s online tool.
- 31st October: Paper tax returns must be submitted by midnight.
- 31st January: Online tax returns must be submitted by midnight.
- 31st January: Any tax owed must be paid by midnight.
What Is the Deadline for Payment of Income Tax?
According to the UK government site, if you are self-assessed, the deadline for payment of income tax is the 31st of January. This is the same date across the board for all taxes owed, no
matter the type of tax you pay.
Penalties for Late Filing and Payments
If you miss your deadline to return your self-assessment tax forms or pay any taxes, HMRC will send you a penalty notice. You will have to pay a late penalty fee, as well as interest on the tax you owe and any penalties.
Penalties for Late Filing:
- 1 Day Late: £100 Penalty Fee
- 3 Months Late: £10 per day Penalty Fee for a maximum of 90 days. (£900)
- 6 Months Late: A Further 5% of the Tax You Owe or £300. (Whichever is greater)
- 12 Months Late: In some cases, you may be expected to pay up to 100% of the tax you owe.
Penatlies for Late Payment:
- 30 Days Late: Pay an additional 5% of the tax you owe at that date.
- 6 Months Late: Pay an additional 5% of the tax you owe at that date.
- 12 Months Late: Pay an additional 5% of the tax you owe at that date.
Corporation Tax Deadlines
Tax for businesses is corporation tax, which is the amount of tax that limited companies in the UK need to pay on their profits. In simple terms, it is the same as income tax but for businesses, except that companies do not have a personal allowance. As soon as your business starts to make a profit, you are expected to pay corporation tax on trading profits, investments and chargeable gains.
Corporate tax years have 4 start dates which a business can choose from;
- 1st April,
- 1st June,
- 1st October,
- 1st January.
Tax Return Deadline is 31 days after the end of your tax year
- Tax Payment Deadline: You have 9 Months and 1 Day after the end of your Account Period to pay your corporation tax bill.
VAT Return and Payment Deadlines
You will file a VAT return to inform the HMRC how much VAT you have paid to other businesses and how much you have charged. Businesses typically send this every three months, also known as the accounting period. You must submit a VAT return form if registered to do so, even if you have no VAT to pay for that particular period.
The deadline to submit your VAT return is one month and seven days after the end of an accounting period. For example, if your accounting quarter ends on 30th September, the VAT return must be made by 7th November.
Payroll and National Insurance contribution deadlines
The majority of people will pay their taxes through PAYE, which means Pay As You Earn. Employers will use this to pay income tax and national insurance contributions (NICs) before the employee receives the rest of the monthly salary or wages.
If the employer makes PAYE or NIC payments late, the HMRC will deliver a late payment penalty charge at the end of the year. However, you might be able to get this charge reduced or even appeal it altogether if you are able to provide reasonable evidence and reason as to why the payment was made late.
Late Filing and Payment Penalties for Corporations
If you file your corporate tax returns late, you will have to pay penalty fines. Late Filing Penalties for Corporation Tax:
- 1 Day Late: £100 Penalty Fine
- 3 Months Late: Additional £100 Penalty Fine
- 6 Months Late: HMRC estimate the corporation tax bill and charges an additional 10%.
- 12 Months Late: An additional 10% of the unpaid tax.
Please Note: If you file your tax return late three times in a row, £100 penalty payments will increase to £500 each.
VAT stands for Value Added Tax, and businesses must register for VAT if their taxable turnover exceeds £85,000. You should also register for VAT if your turnover is expected to exceed £85,000 in the next 30 days. VAT is then added to the cost of products and services that are sold by VAT-registered businesses.
Different VAT schemes offered by the government are designed to simplify how VAT is calculated and accounted for by businesses to the HMRC. Please note that these are voluntary to join and do not change the amount of VAT charged via products and services.
Available VAT schemes include:
- VAT Flate Rate Scheme: For small businesses
- VAT Annual Account Scheme: 1 VAT return a year instead of 4
- VAT Cash Account Scheme: Pay VAT to HMRC when your customer pays you
- VAT Retail Schemes: Calculate VAT once rather than for each sale you make
Consequences of Late Submission and Payment of VAT
If you make a late submission of VAT, you will be sent a ‘VAT notice of assessment of tax’ by the HMRC. This will include calculating how much VAT the HMRC believes you owe. You will be given separate penalties based on whether you submit your VAT return late or make a late payment.
Late VAT Submission
Late VAT submissions are now subject to penalty points; you will receive one point for every late submission. You will also have a penalty point threshold which you will be made aware of, and once you have exceeded this limit, you will be subject to a £200 penalty. Once you have reached the threshold, you will get subsequent £200 penalties for every late submission after that.
It is possible to get rid of penalty points by submitting VAT returns on time in the future. You can learn more about VAT penalty points with guidance from the government UK site.
Late VAT Payment
If you are late to make a VAT payment, you will be charged a late payment interest from the first day that your payment is overdue and will increase until the payment is made in full. This still applies if you are paying in instalments. The penalty amount will also increase after 16 days of non-payment and then again after 31 days.
Tax Year Dates and Deadlines FAQs
We understand that the many different tax year dates and deadlines can be overwhelming. If you have any further questions, find the answers in our most frequently asked questions. Otherwise, you can contact us today for more information and guidance on tax year dates and avoiding late payment penalties.
What happens if I miss the deadline for filing my self-assessment tax return?
If you miss the deadline to file your self-assessment tax return, you will have to pay penalties in accordance with how late you are. We have broken these down previously in our guide. However, you can expect to pay a fixed £100 penalty fee for the first day it’s late and then £10 per day for a maximum of 90 days or three months.
If the return is between 6 and 12 months late, you will be charged a fee of 5% of the tax you owe, potentially 100% if the payment is passed 12 months.
Can I request an extension for filing my corporation tax return?
Yes, requesting an extension for filing your corporation tax return in the UK is possible if circumstances out of your control have interfered. If you require additional time to complete and submit your return, you can formally request an extension. To request an extension, you should contact HM Revenue and Customs (HMRC) as soon as possible and explain your situation. HMRC may grant you an extension if they deem your reasons valid. It’s important to note that each request is evaluated on a case-by-case basis, and there is no guarantee that an extension will be granted.
Can I change my accounting period for tax purposes?
Yes, you can change your accounting period for tax purposes in the UK by notifying HM Revenue and Customs (HMRC) in writing with a valid reason. It’s important to ensure compliance with HMRC guidelines and seek professional advice to navigate the process successfully.
We hope you have found our guide to important tax dates useful and that it has opened your eyes to the importance of maintaining regular submissions and payments. Keeping current with tax returns and payments is crucial to avoid penalties, fines, and legal consequences. It helps maintain compliance with tax laws, ensures accurate reporting of income and expenses, and allows for effective financial planning and budgeting.
Staying on top of tax obligations also helps build a positive relationship with tax authorities. It promotes financial stability and peace of mind for individuals and businesses.
If you’re concerned about your ability to keep up with tax payments, why not find out how to finance a corporation tax bill with the help of Portman Asset Finance? We can help you secure the finance you need to keep up with payments and avoid further penalty charges.
For more information, contact our team of finance experts today.