The cure for a self-assessment New Year hangover
Author: Rivington
31 January is the date when all online tax returns must be submitted but for many small business owners the tendency to allow the date to run away with them and leave the job tax return forms until the last minute is all too common. Small businesses who fail to meet the deadline can expect to face a fixed fine of £100 for being just one day late.
While bookkeeping may be the last thing on your mind after the holiday season, you can still make the 31 January deadline – here is what you need to know:
1. Firstly, it is worth nothing that if you are planning to send in a paper tax return, you have already missed the October 31st deadline. You should now submit your tax return online by 31 January 2012 instead.
2. Your online tax return must reach HMRC by midnight on 31 January 2012 –without fail! If you have not sent an online tax return before, you need to register for HMRC Online Services by 21 January. This will allow HMRC time to send your Activation Code. You can register here for Self Assessment, or get in touch with HRMC for any further advice or help.
3. If you are unsure whether you need to complete a tax return, it is worth contacting HRMC to check. However, if you have relatively straightforward tax affairs and already pay tax through PAYE (Pay As You Earn), you probably will not need to complete a tax return. But if you have more complicated tax affairs – or income from several sources – you may need to complete one.
4. The penalties for late returns are pretty steep and the longer you delay, the more you will have to pay:
1 day late: A fixed penalty of £100. This applies even if you have no tax to pay or have paid the tax you owe.
3 months late: £10 for each following day – up to 90 days, maximum £900. This is as well as the fixed penalty above.
6 months late: £300, or 5 per cent of the tax due, whichever is the higher. This is as well as the penalties above.
12 months late: £300, or 5 per cent of the tax due, whichever is the higher. In serious cases you may be asked to pay up to 100 per cent of the tax due instead. These are as well as the penalties above.
As well as meeting the self-assessment cut-off, getting your finances in order is the key to making sure taxes do not leave a lingering headache in the future. Here are some tips to take the pain away going forward:
* Start with the basics to make future tax deadlines easier to deal with. To quote HMRC guidance, "You must keep records of all your business transactions". There are several key dates and deadlines that small businesses need to be aware of throughout the year so simply pop these in the diary now and set advance reminders to ensure future deadlines don't come as a surprise.
* Make book keeping a priority and do not let financial management fall down the business agenda. Accounting is more than just a legal requirement – it can make or break a business. According to a recent Intuit report entitled, "The Three Year Glitch", more than one in five small businesses still rely on pen and paper accounting. As a consequence of their lack of organisation throughout the year, nearly a third (31 per cent) of UK start-ups have made mistakes with HMRC and one in 10 of businesses operating less than five years ran out of cash.
* Get processes in place as well as setting aside dedicated time each week to review and update the books. There are so many things to think about when running a business and so small business owners should consider using accounting software such as QuickBooks, which is available in a desktop and online version. This will not only to help you track expenses in real-time and manage cash flow, but means that should HMRC come to your door, you have all the necessary records at hand to comply with tax obligations.
Read the full article here. Intuit offers software and services to help small businesses in the UK, check out the easy to use QuickBooks Online version
While bookkeeping may be the last thing on your mind after the holiday season, you can still make the 31 January deadline – here is what you need to know:
1. Firstly, it is worth nothing that if you are planning to send in a paper tax return, you have already missed the October 31st deadline. You should now submit your tax return online by 31 January 2012 instead.
2. Your online tax return must reach HMRC by midnight on 31 January 2012 –without fail! If you have not sent an online tax return before, you need to register for HMRC Online Services by 21 January. This will allow HMRC time to send your Activation Code. You can register here for Self Assessment, or get in touch with HRMC for any further advice or help.
3. If you are unsure whether you need to complete a tax return, it is worth contacting HRMC to check. However, if you have relatively straightforward tax affairs and already pay tax through PAYE (Pay As You Earn), you probably will not need to complete a tax return. But if you have more complicated tax affairs – or income from several sources – you may need to complete one.
4. The penalties for late returns are pretty steep and the longer you delay, the more you will have to pay:
1 day late: A fixed penalty of £100. This applies even if you have no tax to pay or have paid the tax you owe.
3 months late: £10 for each following day – up to 90 days, maximum £900. This is as well as the fixed penalty above.
6 months late: £300, or 5 per cent of the tax due, whichever is the higher. This is as well as the penalties above.
12 months late: £300, or 5 per cent of the tax due, whichever is the higher. In serious cases you may be asked to pay up to 100 per cent of the tax due instead. These are as well as the penalties above.
As well as meeting the self-assessment cut-off, getting your finances in order is the key to making sure taxes do not leave a lingering headache in the future. Here are some tips to take the pain away going forward:
* Start with the basics to make future tax deadlines easier to deal with. To quote HMRC guidance, "You must keep records of all your business transactions". There are several key dates and deadlines that small businesses need to be aware of throughout the year so simply pop these in the diary now and set advance reminders to ensure future deadlines don't come as a surprise.
* Make book keeping a priority and do not let financial management fall down the business agenda. Accounting is more than just a legal requirement – it can make or break a business. According to a recent Intuit report entitled, "The Three Year Glitch", more than one in five small businesses still rely on pen and paper accounting. As a consequence of their lack of organisation throughout the year, nearly a third (31 per cent) of UK start-ups have made mistakes with HMRC and one in 10 of businesses operating less than five years ran out of cash.
* Get processes in place as well as setting aside dedicated time each week to review and update the books. There are so many things to think about when running a business and so small business owners should consider using accounting software such as QuickBooks, which is available in a desktop and online version. This will not only to help you track expenses in real-time and manage cash flow, but means that should HMRC come to your door, you have all the necessary records at hand to comply with tax obligations.
Read the full article here. Intuit offers software and services to help small businesses in the UK, check out the easy to use QuickBooks Online version
Article Source: http://www.articlealley.com/http://rivington.articlealley.com/the-cure-for-a-selfassessment-new-year-hangover-2408419.html
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