Written by Connect Yorkshire's Sponsor - Knowles Warwick
It is such a busy time of year, with Christmas around the corner, presents to give and receive and parties to organise and attend, but it is important to remember the mundane things that still need to be organised around the festivities – like your tax return.
As a business owner, you probably know that you need to complete a tax return and that the deadline for doing so and for paying any tax that you owe is midnight on 31 January 2012, otherwise you will be asked to pay a penalty. You’ve already missed the deadline for filing your return using a paper form, so you will need to submit your details using HM Revenue & Customs (HMRC)’s Online Services instead. Before you can do this you will need an activation code, which HMRC will send you when you register, but the deadline for registering is 21 January 2012 so you’ll have to be quick!
A fine of 5% of your tax bill will be charged if the payment is 30 days late, another 5% charge will apply if it is 6 months late and a further 5% charge will apply if the payment is 12 months late, plus any interest that has accumulated during this time. If you have registered for HMRC Online Services you can make sure that your bills are always paid on time by setting up a Direct Debit mandate. Another option would be to set up a payment plan that will help you to manage your money by breaking down the total amount that you owe into smaller chunks.
If you have an accountant, you can offload some of the stress by asking them to take care of everything for you, although it is still your responsibility to give them the information they need to complete it before the deadline. Here are some examples of the kinds of records that you (or your accountant) will need for filling in your tax return:
- Business income and expenses
- Purchases or sales of assets
- Income from savings and investments, split by bank or building society
- Details of any other income from sources such as property or employment
HMRC have up to 12 months to query your tax return, so you need to keep all your financial records for at least a year after you have submitted it, but if you complete your tax return late (i.e. after the 31 January deadline) you will need to keep your records for 15 months afterwards instead, otherwise HMRC may charge you a penalty.