The self-assessment tax deadline is January 31st, and it isn’t just individual taxpayers feeling the heat. Many small businesses, particularly those structured as limited liability partnerships, will also need to file their tax returns and make payments to HMRC.
Who needs to file a self-assessment tax return?
Most taxpayers have their taxes deducted automatically and don't need to file a tax return. However, nearly 12 million tax returns are due this year, from individuals and businesses who have not had tax automatically deducted or have extra untaxed income.
You will need to submit a return if any of the below applied to you in the last tax year:
- You're self-employed and your income was over £1,000
- You or your partner claimed child benefit and your income was over £50,000
- You earned over £2,500 from property rental, or other untaxed income
- You earned over £100,000 in taxable income
- You earned £10,000 or more before tax from savings, investments, shares or dividends
- You earned income from abroad or lived abroad and had a UK income
- You have paid capital gains tax
- You are a trustee
- Your state pension was over your personal allowance and was your only source of income (unless you started getting your pension on or after 6 April 2016)
- HMRC informed you that you didn't pay enough tax last year
Use the Government's tool to check whether you need to file a tax return.
If you filed a self-assessment tax return last year, you'll need to file one this year as well – even if you don't owe any tax, unless the HMRC has specifically written to you to say you don't need to file a return.
Get a free finance quote for your tax bill
How to register and file a tax return online
The HMRC says that nearly 94% of tax returns are filed online are because it is easy, secure and available 24 hours a day.
HMRC expects you to file online and it’s soon likely to be the only way to submit a return.
If you have not completed a tax return online before, you will need to register for an HMRC online account. When you have signed up, HMRC will post you an activation code or Unique Taxpayer Reference (UTR). This can take 10 working days to arrive – or up to 21 days if you are abroad – so do this well in advance.
What do you need for a tax return?
Before applying online for Self-Assessment, gather all the information you need in advance.
Avoid Self-Assessment tax scams
HMRC has warned Self-Assessment customers to be aware of fraudsters in the run up to the 31 January deadline.
In 2019, they received nearly 900,000 reports from the public about suspicious HMRC contact – phone calls, texts or emails. More than 100,000 of these were phone scams, while over 620,000 were about bogus tax rebates.
HMRC operates a dedicated Customer Protection team to identify and close down scams but is advising customers to recognise the signs to avoid becoming victims themselves.
It is worth noting that HMRC will never contact customers asking for their PIN, password or bank details and you should never give out private information, reply to text messages, download attachments or click on links in texts or emails which you were not expecting.
If you receive anything you think is suspicious, you should forward details to email@example.com and texts to 60599.
Paying your tax bill
Most businesses handle their tax liabilities using cash flow, but there are other approaches which can be more efficient. Companies of all types are increasingly choosing to finance their tax payments.
A little flipside finance from White Oak UK will allow you to spread this cost over 6, 10 or 12 months while avoiding late payment charges from the HMRC, ensuring your tax liability is covered, whilst leaving cash in the business to be funnelled back into the most profitable areas and ultimately increasing your bottom line over the year.
While enabling the business to continue with their plans as normal, it’s psychologically beneficial too. We generally find that once people have made the decision to finance their tax bill, it takes the pressure off and allows them to get on with their day job.
We can provide decisions in principle within a few hours, but this isn’t just an option for people who have yet to pay their tax bill. Even if you have already made the payment, it can still be refinanced.
In the first few weeks of February, small business owners often realise that their tax payment has made their cash flow significantly less favourable, so look to this sort of facility so they can continue to move forward with their investment and plans.
To discuss how a tax loan could help your business, contact White Oak UK today on arrange a call back to talk through your options with our team.or