The chartered Institute of Taxation was recently asked to identify a dozen important tax dates for small businessmen and women. Not wishing to appear ungenerous, we came up with a baker's dozen. But what is the significance of these dates and why might they be "unlucky for some"?
Most readers are probably aware of the significance of 31 January. Hector (now retired) and Mrs Doyle have appeared regularly, telling the populace that this is the last date for sending in their tax return to avoid penalties. It's also the main tax payment date under self-assessment.
28 February is an unlucky date for those who fail to get cash flow correct. A surcharge is imposed on those who have not paid all their tax due at 31 January and have not managed to find the money 28 days later. The surcharge is 5 per cent of the tax outstanding.
31 March is a date for companies, which pay corporation tax on their profits rather than income tax. Corporation tax is levied by reference to the financial year, which ends on 31 March.
The start of the income tax, capital gains tax and inheritance tax year is 5 April – the fiscal year. It's an odd date, steeped in history. Until the mid-18th Century, the Government used an accounting year that ended on Lady Day (25 March), but when the Gregorian calendar was adopted in 1752, 11 days were "lost" and the accounting year moved forward to 5 April.
The next five dates are relevant to businesses with employees and relate to PAYE completion for the previous fiscal year:
19 April is the last date for any PAYE/NICs payments to reach the Revenue
19 May is the last date for P14s and P35 (end of year returns of pay, tax, and NIC) to reach the Revenue
31 May is the last date for giving a form P60 (pay details) to employees
6 July is the last date for submitting P9D and P11D (return of benefits) to the Revenue and employees
19 July is the date for payment of Class1A NICs on benefits provided
Then 31 July is the date for the second payment on account of income tax due for the previous fiscal year.
31 August is the date for a second surcharge (a further 5 per cent) on tax still outstanding from 31 January.
30 September is another date much publicised by Hector and Mrs Doyle. It is the last date for submitting the previous year's tax return if you want the Revenue to calculate your tax liability or if you have an underpayment of tax (maximum £2,000) that you want "coded out" through PAYE rather than having to write a cheque.
Finally, 5 October is the date for notifying the taxman that you are liable to income or capital gains tax. There's no need to do this if you've been sent a tax return, nor if PAYE covers all your income. But if you have new freelance income or have started a new business, you should be putting your hand up to the Revenue by six months after the end of the tax year in which you started – hence 5 October.
Not all taxpayers realise that the obligation is on them to tell the taxman that they are liable to tax. In practice, for those who are self-employed, the date is beginning to have less meaning. Persons starting their own business must register for Class 2 National Insurance within three months of starting to trade (or face penalties) and this registration is taken by the Revenue as a notification of the liability to tax as well.
Since individuals can start their businesses at any time, it was impossible to put this important date into our baker's dozen, but it can mean that ANY date in the calendar can be important for tax purposes!
John Whiting is President and Liz Lathwood Technical Officer of the Chartered Institute of TaxationReuse content