Important: what you need to know and do before Christmas

As we fast approach the holiday season here’s some information you need to know before you stop working and start eating Turkey (or Quorn).

Self-assessments

Like Christmas, tax self-assessment deadlines also happen on the same date every year, and it’s important to ensure your income records are accurate and up to date as soon as possible, before January.

This not only gives you clarity on how much you’ll need to pay, but allows you to put in necessary measures if you’re likely to be short of cash (minus anything you’ve already paid on account).

If you’re a Director of a company and you receive any income that doesn’t go through PAYE, you need to send your accountant full income details for the tax year 2019/2020 asap. This additional income could be dividends, land or property rental income, self-employed income or investments etc.

Remember your accountant will be filing lots of self-assessments before 31 January, so the earlier you send the information, the quicker they can file this and you avoid potential late filing penalties.  

 

Corporation Tax

If your company’s year-end is 30th April you need to send your accountant your up-to-date corporate accounts information so they can be worked on and submitted in time for the end of January 2021. This gives plenty of time to gather anything that’s missing well in advance of the submission date.

Just like self-assessments, this gives you clarity on what’s due, and time to put in corrective measures if you’re going to have a shortfall of funds.

If your year end is October or before, now is the time to send over your accounts. This allows your accountant to start preparing your accounts as soon as possible and advise you of the amount of tax due so you can plan it into your cashflow.

 

Covid support and how it affects your Corporation Tax

Just a reminder, Covid grants from your local council and HMRC are classed as taxable income so when it comes to filing for periods ending after March 2020 your next tax bill may be higher than you were expecting due to this additional ‘income’.

Your company’s year-end date will affect when you have to pay this. Corporation Tax is due 9 months and 1 day after the company year-end.

 

Coronavirus Job Retention Scheme (CJRS)

All CJRS (furlough) you’ve claimed from HMRC since the end of March will be offset against staff costs, so there shouldn’t be a high tax bill arising from these grants.

 

Covid VAT Deferral payment scheme

Did you defer VAT payments that were due between 20 March and 30 June 2020?  Will you struggle to pay them before 31st March 2021?

If you know you won’t have the available cash then you can spread the payments over smaller, interest free, instalments from 2 to 11 equal monthly payments until the end of March 2022.

To participate in this scheme, you must still have deferred VAT to pay, be up to date with your VAT returns, pay your first instalment by end of March 2021 and pay by direct debit.

You must opt-in before 31st March to take advantage of this through your Government Gateway account, but you can’t opt in yet; it will be available in early 2021.

 

As always, if you need clarity on anything at all ask your Kaizen contact.

Kaizen’s office will be closed from 4.30pm on Wednesday December 23rd until Monday 4th January 2021.

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@ The Business Hub
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Harpings Road
Hull
HU5 4JF

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