Small business owners are required to juggle various responsibilities, including keeping up with key accounting and tax filing deadlines. Ensuring you stay organised and have important dates diarised will mitigate the risk of receiving unnecessary HMRC penalties as well as keeping your cash flow healthy.
To help you plan your accounting and tax year, below are the key dates you need to be aware of in 2022/early 2023.
The tax year, also referred to as the financial year, is different from the January to December calendar year. Therefore, although you are reading this in March, the dates referred to in this article lie in the future.
In the UK, the tax year runs from 6th April to 5th April of the following year. Therefore, the start of the 2021 tax year is 6th April 2021, and it will finish on 5th April 2022. Dates referred to as “during the tax year” fall between the two aforementioned dates.
In September 2021, the Office of Tax Simplification published a review examining the benefits, costs, and wider implications of changing the tax year so it aligned with the calendar year.
The review stated that “given the increasing automation, internet-enabled commerce and digitisation of financial information and accounting systems generally” there were several benefits in aligning the tax year with the calendar year. The cost of changing the dates of the tax year is significant, however, and there is no indication that dates are set to change any time soon.
If you have not completed a self-assessment tax return you must register by 5th October 2022 if you need to file a tax return for the 2021/22 tax year.
Self-assessments must be filed annually as HMRC use the information contained in them to calculate whether or not you owe any tax and if so, how much. You can file your return by post or online.
If you choose to file online, the deadline for the 2021/22 tax year is 31st January 2023. The deadline for postal assessments is 31st October 2022.
The deadline for self-assessment tax payments is 31st January 2023.
Once your annual turnover exceeds £85,000 you will need to register for VAT, begin charging VAT to your customers and pay the VAT you receive to HMRC.
On becoming aware that you will exceed the VAT threshold in a particular month, you must register for VAT within 30 days. Alternatively, if you exceeded the threshold in the past 12 months and are not yet registered for VAT you must register within 30 days of the end of the month in which you passed the threshold.
VAT returns are filed and paid quarterly and are due one calendar month and seven days after the end of an accounting period.
The GOV website provides a helpful VAT calculator.
If you have employees there are several PAYE deadlines to keep in mind. These are as follows:
P45 forms must be filed when an employee leaves your employment, and the employee must receive a copy.
If you provide benefits such as the use of a company car, gym membership, or childcare to your employees you must file a P11D by 6th July 2022. This date is also the deadline for filing returns of Class 1A NICs (forms P11D(b)) to HMRC.
If you are a limited company you need to file a company tax return and pay corporation tax annually. The payment date of corporation tax depends on when you registered your company rather than the tax year. This is known as your accounting period. For example, if you registered your limited company in September, the deadline for paying your corporation tax is nine months and one day after the end of your accounting period. The deadline to file your company tax return is 12 months after the end of your accounting period.
Top tip – many small businesses fail because they earn too much money in their second year and do not have the cash reserves to meet their corporation tax payment. When calculating how much to set aside for your corporation tax, always add 10% more than you need. This will provide you with a buffer if you have an extremely successful subsequent year.
Capital Gains Tax (CGT) may need to be paid by sole traders and partnerships if a business asset is sold or disposed of. For example, if you sell a piece of land owned by your business, CGT will apply to the increase in value gained since it was first purchased.
You will need to report the details of any sold or disposed of assets in your self-assessment tax return for the year in which you realised the gain. The deadline for CGT on assets sold or disposed of in the 2021/22 tax year is 31st January 2023.
Knowing and planning for key accounting and tax dates is part of any small businesses’ success strategy. If you have any questions on the dates or taxes mentioned above, please do not hesitate to contact one of our Commercial Law Solicitors.
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