Keeping track of tax dates is an important part of running a business. Knowing filing and payment deadlines can help small business owners avoid fines and improve cash flow.
Different types of businesses will face different tax obligations. A sole trader may focus primarily on Self Assessment deadlines. In contrast, a founder who has gone through company formation to set up a limited company may need to think about corporation tax obligations. Businesses with employees or those that are VAT-registered will have additional reporting requirements, too.
Quality Company Formations will outline some of the most important tax deadlines that small businesses need to keep on their radar.
Understanding the UK tax year
Many tax deadlines in the UK revolve around the tax year, which runs from 6th April to 5th April of the following year. There isn’t necessarily a requirement to pay tax or file on these dates, but the tax year often acts as a reference point from which many deadlines are calculated.
Self Assessment deadlines for sole traders and company directors
Currently, the main way sole traders report their income and calculate their tax liability is through Self Assessment. This is the main system His Majesty’s Revenue and Customs (HMRC) uses to collect Income Tax from people whose tax isn’t deducted through Pay As You Earn (PAYE), or who are earning untaxed income beyond employment.
If you’re a company director, you don’t necessarily need to file a Self Assessment. However, even if you pay tax for your earnings as a director through PAYE, you may still need to file if you have other income.
There are a few key dates to consider for Self Assessment:
Registration
Individuals who need to submit a tax return must notify HMRC by 5th October following the end of the relevant tax year.
It’s best to register as soon as possible, as this can reduce the risk of delays down the line and allow you to file sooner.
Paper tax return deadline
If you want to submit your Self Assessment via a paper tax return, you’ll need to file earlier than those who do so online.
Generally, you’ll need to file paper returns by 31st October after the tax year ends. You can download paper forms online and print them at home. Alternatively, you can request a copy from HMRC.
Online tax return and payment deadline
Self Assessment returns are generally due by 31st January, which is also usually the deadline for paying any tax owed for the previous tax year.
Many business owners leave filing until January, but this can make it harder to budget for the final bill. If you file earlier, you can often better manage cash flow by knowing how much tax you’ll need to pay.
Payments on account
Some taxpayers may be required to make advance payments towards their next tax bill. This can come as a surprise to some first-time founders. It’s another reason why filing earlier can help you better budget.
Payments on account are usually due on 31st January and 31st July. They are designed to help spread tax payments across the year.
It’s also worth noting that some sole traders and landlords may now fall within the scope of Making Tax Digital (MTD) for Income Tax. MTD is a system that requires certain taxpayers to keep digital records and submit information to HMRC using compatible software. As a result of the gradual introduction of MTD, some sole traders may need to submit quarterly updates alongside a final year-end declaration, rather than submit all tax information in a single annual filing.
VAT deadlines
Only businesses that are VAT-registered need to meet VAT filing and payment deadlines.
VAT-registered businesses will need to complete VAT returns to tell HMRC how much VAT the business has collected and how much it has paid on eligible purchases.
As for deadlines, VAT returns are usually submitted every three months, but the specific dates can vary because businesses can have different VAT accounting periods. Generally, the filing and payment deadlines are one calendar month and seven days after the end of each VAT period. So, if a business has a quarterly period ending on 31st March, it will typically have a VAT deadline in early May.
Even businesses with no VAT to pay will still need to submit a return if they are VAT-registered.
PAYE deadlines for employers
Businesses with employees take on additional tax responsibilities. Employers collect Income Tax and National Insurance contributions directly from employees’ wages through PAYE. It’s then the employer’s responsibility to pass these amounts to HMRC.
PAYE reporting is an ongoing monthly requirement. Payments are due by the 22nd of the month following the end of the tax month if paying electronically, or the 19th if paying by post.
In addition to PAYE deadlines, employers have other year-end responsibilities, such as issuing employees with P60 documents. Maintaining organised payroll records is crucial for staying compliant and meeting deadlines.
Corporation tax deadlines for limited companies
Limited companies pay Corporation Tax. While sole traders and employees are taxed on their personal income, limited companies’ profits are taxed through Corporation Tax.
The deadline for Corporation Tax is usually linked to the limited company’s accounting period, rather than a universal calendar date. As a result, there is no one set deadline. However, generally, Corporation Tax payments are due several months after the end of an accounting period. As specific filing and payment dates vary between businesses, a director needs to know their company’s accounting period to work out the deadline date.
Why planning involves more than memorising dates
Understanding your tax obligations as a small business owner is about more than knowing the relevant dates. For a start, some deadlines vary from business to business. This means you’ll need to understand the specific obligations and deadlines that apply to your business.
Once you know the relevant dates, avoid relying on memory alone. Instead, set calendar reminders, including some that allow you enough time to gather and check figures before filing deadlines.
Maintaining accurate bookkeeping throughout the year will make it easier to manage filing when a deadline approaches. It’s also worth keeping funds aside for potential tax liabilities to help with cash flow.
Missing deadlines may lead to penalties and administrative complications. If you’re unsure about your obligations, you can seek professional advice to help you stay compliant.
Staying on top of tax deadlines
Understanding the tax deadlines that apply to your business can help you better manage administrative duties with less stress. Tax compliance becomes easier to manage when you prepare for deadlines throughout the year, rather than react to each one at the last minute.
As a business grows, tax responsibilities often become more complex. The sooner you develop good tax management habits, the better equipped you will be to support your business in its growth journey.