15 Nov If you don’t know your tax figure yet, why not?
If you are self-employed, it is your responsibility to calculate your tax figure and report this to HMRC by the given deadline.
Some reasons why people delay finalising their taxes include:
- perceived lack of time
- lack of knowledge
- not sure where to start
- weren’t aware there was a deadline
- lost their log-in details for the HMRC portal
- they thought their accountant would do it for them
The deadline for filing your online Self-Assessment for the tax year ending 5 April 2017 is 31st January 2018.
This is also the deadline for paying any income tax that is due, Class 4 National Insurance Contributions and for making your first payment on account for 17/18.
What does ‘payment on account’ mean? If you don’t know, you are not alone. It is essentially an additional tax payment made twice a year, in January and in July. It was designed to align the tax payment to the current tax year so that HMRC are not waiting so long between when you earn your income and when you pay across the tax. The payment on account is calculated based on the current year’s tax bill (16/17 in this example) and divided equally between the two instalments. It is possible to adjust your payment on account if your profits vary greatly between the 16/17 and 17/18 tax years.
It’s important when calculating your tax figure, that you take into consideration your first payment on account and set money aside for this as well.
What about VAT?
If you are VAT registered, you may also have to make a payment as well. However, this is dependent on when you registered for VAT and when your accounting period starts and finishes. If you file your VAT return online, you normally have one full calendar month and seven days from the end of the accounting period to complete the return and make payment.
If you have any questions regarding VAT, please give us a call on 020 3866 8951 to see how our specialist VAT service for small business owners could help you.
Even though the deadline for filing your Self-Assessment is less than three months away if you act now there is still time to get it all completed without causing yourself stress and anxiety.
To help it go smoothly, dedicate a time to get it done, sort all your paperwork before you sit down to work out our tax liability and if you are struggling, speak to your accountant.