Useful deadlines and dates
Filing deadlines
Self-assessment return
- Paper returns – 31st
- Online return – 31st
Corporation tax return
12 months after the accounting period end
Abbreviated accounts
• 9 months after the accounting period end
Payment deadlines
Income Tax and Class IV NIC • Balancing payment and payment on account for next year -31st
January Corporation Tax
• 9 months and 1 day after accounting period end
Capital Gains Tax
• 31st made January after the year in which the disposal was made.
• 6 months after the month of death or chargeable transfer
PAYE
• 19th day following the month end
Useful Tables
Income Tax allowances
| Income Tax allowances | 2023/24 | 2022/23 |
|---|---|---|
Personal allowance | £12,570 | £12,570 |
| Basic rate 20% | £12,571 to £37,700 | £12,571 to £37,700 |
| Higher rate | £37,701 to £125,140 | £37,701 to £150,000 |
| Additional rate | over £125,140 | £150,000 |
| Trading allowance | £1,000 | £1,000 |
| Blind Person’s Allowance | £2,870 | £2,600 |
Business Structures
Sole Trader
A sole trader is an individual who has set up and controls a business by themselves. Typically they offer a service such as building, plumbing or IT services. Although they can sell goods and employ someone e.g. a shop or restaurant. Setting up your business as a sole trader is probably the simplest and cheapest method but it’s worth remembering that the law does not differentiate between you and your business. Therefore, you personally are liable for your business debts. There are advantages to trading as sole trader. Unlike a company, where all business information, including director’s details and annual accounts are made public, a sole trader can keep such information private.
All business types are required to keep books and records for their accounts and to satisfy HMRC, although the reporting requirements for a sole trader are less onerous and complicated than for a Limited company. This usually leads to lower accounting costs for a sole trader.
If you select the sole trader path, you will need to notify HMRC that you are self – employed and liable for Class 2 National Insurance soon after you commence trading, and within 3 months of your starting date to avoid penalties
Limited Company
A Limited Company is a separate legal entity. This means in the eyes of the law, it is separate from the people who own it (the shareholders or members) and the people who run it (the directors). In small to medium sized companies the shareholders and directors may be the same people, but they do not have to be.
The liability of the company is limited, in contrast to sole traders who are solely responsible for business debts.
Setting up a company is slightly more complex than the sole trader option, and involves registering your new company with Companies House. In addition, certain documents will need to be annually filed there. These include the annual accounts and the annual return.
The annual return is a snapshot of certain company information and includes registered office address, company directors’ details, shareholder details. Therefore this information along with the annual accounts of the company is public information. Whilst there can be tax savings for the owner of a limited company there are tighter constraints on how much can be drawn from it.
Traditional Partnerships
Traditionally partnerships were 2 or more sole traders that have grouped together to run a business. Just like a sole trader, the individual partners are taxed on the profits of the business NOT their drawings. A partnership will need a partnership agreement which sets out how the profits of the business are shared.
The partnership itself will need to file a tax return and each of it’s member will also need to file self-assessment returns showing their share of the partnership profits along with any other sources of income and reliefs.
The liability of the partners is unlimited. Therefore the individual partners can be liable for the debts of the partnership business.
LLP (Limited Liability Partnership)
A Limited Liability partnership combines elements of a traditional partnership and a limited company. The LLP itself is a separate legal entity and therefore can own assets in it’s own right and is fully liable for it’s own obligations. However the liability of it’s members is limited. For a trading LLP the profits are taxed under the rules which apply to the members. i.e. income tax for individual members and corporation tax for a corporate member.ade