By James Nadal | December 18, 2020 | 6 minutes of reading

We’ve all been there at one time or another. Whether it’s because you’ve recently changed jobs, your personal allowance has changed, or your marital status has changed, it’s inevitable that you’ll need to change your tax code at some point.

You may also need to check your tax code to make sure it is correct and up to date. Even if you think you are on the correct tax code, you may be overpaying or underpaying HMRC by a significant amount.

Don’t worry; It’s a lot easier than you think. This guide will teach you why a tax code is important, how to verify that it is correct, and how to change it if it is not.

What is a tax code?

Employers and pension providers use your tax code to determine how much income tax to withhold from your salary or pension.

All full-time or part-time employees and those with a private pension have a tax code. Examples of earlier codes include 1185L and 1150L. Although at first glance it may look like a random string of letters and numbers, it is key information that affects your finances.

Why are tax codes important?

Employers calculate how much tax should be deducted from your salary or pension before hitting your bank account. HM Revenue and Customs (HMRC) tells them which code to use to collect the correct amount of tax, so this is an important part of the process.

If for any reason there is an error in your tax code, this may result in inaccurate payments to HMRC. This can add up to hundreds of dollars, so it’s important to check that you’re on the correct tax code.

People receiving only a state pension and the self-employed do not have a tax code and must instead complete and lodge a self-assessment return to report their tax.

How to check your tax code

There is an easy way to check your tax code on the web. Visit the Check your income tax page on the HMRC website.

It is important to verify that this is correct. Otherwise, you may have to file a refund request or, even worse, find money you didn’t think you’d have to pay.

What tax code should I be on?

You may be wondering, “How do I find out my tax code?” » Fortunately, it’s a simple process. Use HMRC’s online checker tool to find out which tax code you should use.

You will also be able to see an estimate of the amount of tax you should pay over the entire year.

Why has my tax code changed?

The most common reason for a tax code change is if your tax-free income (personal allowance) increases or decreases according to HMRC. This may be because they have started or stopped receiving a taxable benefit such as a company car.

Getting married or moving can also be the cause. You can get an emergency tax code for a second job. These are meant to be temporary, but it’s still important to check.

Your employer should receive an email alert if your tax code changes. The HMRC website will also be able to tell you if your tax code has changed, how your tax code is drawn up and how much tax you are likely to pay.

You can also notify HMRC directly of a change affecting your tax code via the same checker tool.

Change your tax code

If your tax code is incorrect, you will need to change it to avoid paying the wrong amount to HMRC. There are three ways to do this: online, over the phone or with the help of professional accounting services.

Change tax code online

You may need to contact HMRC or change your tax code online if you think it is wrong. Visit the Income Tax: General Inquiries page or notify them of any changes using the Income Tax Checker tool.

Change tax code by phone

If you prefer to change your tax code over the phone, you can call the government’s Income Tax: General Inquiries hotline on 0300 200 3300.

Change the tax code via a professional

An accountant can help you with your tax requirements, including your tax code.

Many accountants rely on our tax and accounting software to manage their clients’ tax requirements. It’s a flexible cloud solution that can handle all the heavy lifting for you.

By Alan Gregory | April 8, 2021 | 7 minutes of reading

This guide takes you through the fundamentals of UK corporation tax, helping you understand an essential part of business taxation and answering your questions.

Whether you’re a start-up facing corporation tax for the first time, an established business looking to better understand your finances, or an accountant wanting to give clients an easy-to-understand overview, this helpful tax guide on companies answers you – to know in detail.

By breaking down the key facts in bite-sized segments, we walk you through the essentials step-by-step to ensure that tackling this important business tax is feasible and not intimidating.

Just looking for a quick answer to a question? Click on the menu below to go directly to the answer.

What is corporate tax?

Corporation tax is a UK business tax that limited companies, as well as some clubs and societies, must pay to HMRC based on their annual profits – the money earned after deducting overheads and expenses. It must also be paid on the profits that companies make from their investments or from the sale of fixed assets at a price above their cost. As soon as your business starts making a profit, you start paying corporation tax (unless the business has already reported losses).

In a nutshell, corporate tax is like an income tax for businesses; except that businesses do not benefit from tax exemption, so all profits are taxable. This tax is not new, it has existed since 1965, with rates previously peaking at 52% in 1982! What is the corporate tax rate today? Fortunately, it is significantly lower than 19%, which is the lowest rate in the G7 (the Group of Seven includes Canada, France, Germany, Italy, Japan, the United Kingdom and the United States -United).

How much is the corporate tax?

Currently, there is a standard corporate tax rate on company profits, at 19%. In simple terms, if a company makes a profit of £50,000, the eligible tax on this would be £9,500. However, if the business makes a loss but previously generated a profit, it may be entitled to a tax refund by carrying that loss forward to the previous year.

In the 2021 budget, An overhaul of corporate tax rates has been announced and will come into force in 2023. SMEs with profits of £50,000 or less will fall into a new small profits category and will continue to pay the 19% rate. Those with profits above £50,000 and up to £250,000 will pay a decreasing rate of corporation tax. The rate of corporation tax paid will increase to 25% for businesses with profits above £250,000.

How it is calculated

Understanding how to calculate corporate tax is crucial to meeting the requirements, and an accountant or tax advisor can advise or take care of this for businesses that need help. Accurate recordkeeping is essential and knowing tax breaks is beneficial to ensure your business overpays in taxes.

Here’s how to calculate corporate tax in five basic steps:

• Calculate sales and revenue using a profit and loss statement. Include all sales and interest earned.
• Determine overheads and expenses – you can only claim expenses that HMRC classifies as “wholly and exclusively” for business use. Deduct this amount from income to get the profit.
• Establish capital deductions. Fixed assets that have been part of the business for several years depreciate in value – but depreciation is not an allowable expense and must be added back into the tax calculation. However, most capital asset purchases will qualify for tax relief from the annual investment allowance, which can be used to reduce the amount of taxable profit.
• Consider entertainment costs. Costs related to entertaining customers and suppliers are not tax deductible.
• Calculate the tax due. Add any depreciation and customer receipt charges to profit before totaling the accounts, then subtract any capital deductions. This gives you the sum of profits subject to corporation tax.

Who pays corporate tax?

All UK limited companies must pay corporation tax, regardless of their size. Also liable are overseas companies with a branch or office in the UK, as well as organisations, including clubs, societies, associations and co-operatives (even if unincorporated). Sole traders or partnerships do not pay corporate tax.

When setting up a limited company, registering for corporation tax with HMRC should be at the top of your to-do list and should be completed within three months of commencing trading . Understanding this tax obligation is vital for any business from the start, which is why it is taken into account and comes as no surprise.

When is this due?

The deadline for paying corporate tax differs depending on your accounting period, making it a more complicated tax than others. The payment deadline is nine months and one day after the end of the financial year of your previous financial year. Even if your business is loss-making and no tax is due, it still needs to be reported to HMRC.

So, when should you pay? Corporation tax must be calculated and paid to HMRC before filing a corporation tax return, which must be made within 12 months of the end of the financial year. For example, if your exercise was 1^st January-31^st December 2018, your tax must be paid before the 1^st October 2019. The corporate tax return must be filed before 31^st December 2019. If this is a new business, two accounting periods for corporation tax can be defined to ensure that the accounting period does not exceed 12 months.

How to pay corporate tax

Registering for corporation tax is the first task, even if you don’t pay until some time later. A business or designated accountant must prepare and file a corporate income tax return, also known as Form CT600, each year. A ‘Business Tax Return Notice’ from HMRC should remind you of this. Whether or not the company owes tax, the return must be filed.

You must either pay the tax due or declare that there is nothing to pay – but either outcome must be done before your corporation tax deadline. Consider the time it will take for your payment to reach HMRC, depending on your payment method; the money must be received before the deadline to avoid a fine. Our software for accountants and tax advisors can help you prepare and file a corporate tax return (CT600).

How to reduce your professional tax

Before you continue reading, it is imperative to understand that it is illegal to evade any kind of tax. Corporate tax is a compulsory professional tax; but there are legitimate ways to reduce the amount you have to pay for tax evasion. This particular tax is often one of the biggest bills a business faces, so taking steps to reduce it can be extremely helpful and is completely legal.

Here are four potential steps to reducing corporate taxes:

• Report eligible expenses incurred solely for business use. Salaries and employer network cards also count as a business expense. By deducting this, we reduce the amount owed in tax and reduce the bill.
• Draw a salary. As above, a salary and employer NICs are business expenses. Many business owners also choose to pay themselves dividends, but these are not a business expense.
• Offset business losses with capital gains. Get tax relief by offsetting the loss against other gains or profits in the same accounting period – and you can choose to carry the loss back.
• Pay HMRC early. If you pay your bill early, HMRC will refund part of it in the form of interest. This is generally calculated from the payment date until the payment deadline. The earliest date from which they pay interest is 6 months and 13 days after the start of your accounting period.

Conclusion

So, what is corporate tax? It is an unavoidable and completely unavoidable part of running a business – and a tax that generates substantial revenue for the government. Support from accountants and tax advisors can help businesses navigate this and save money by reducing liability, but many businesses are successful in going it alone.

Remember, the corporate tax rate is expected to change in 2022 and 2023. Make calculating your corporate tax easier by keeping accurate accounting records – business accounting software can help you with this. Make sure you pay on time and, finally, don’t pay more taxes than necessary by looking at legitimate ways to reduce payments.

IRIS can help you tax and accounting software which helps businesses and practitioners stay compliant and manage corporation tax simply and efficiently. Need more? View our full range of tax software Today!

By Alan Gregory | May 19, 2021 | 8 minutes of reading

It’s payday. You look at your pay slip, but something doesn’t seem right.

You ask yourself: “Did I pay too much tax?”

The same thing may have happened when your self-assessment calculation arrived from HMRC.

It’s quite possible that, for one reason or another, you paid too much at some point in the past.

This could include, among others, income tax, corporation tax or capital gains tax.

Below we’ll look at the most common types of tax people pay in the UK and help you understand if you can get tax back, when you need to claim it back and how to claim tax back if you have to .

How do you know if you’ve paid too much tax?

Before we look at how you can claim back taxes, it’s important that you know whether you’ve actually paid too much tax.

What do you need to do?

Well, for starters, you can use the services on the Government website. These let you know if you have paid too much tax and help you check your income tax payments and exercise how much income tax you should pay.

For example, you may have compared your tax code to your personal allowance and thought it was wrong. If this is the case, you should contact HMRC directly to confirm. Alternatively, you might be interested in reading our recently published guide to how to change your tax code for further reading.

You may also be able to speak to your payroll department, if you are employed, to ask for their assistance. You may need to provide P60 if you think you have overpaid tax in previous years.

Can you claim a tax reduction?

Yes, if you overpaid taxes, you can get them back. Provided you claim in time. You may need to complete an R38 form. If you need to complete an R38 form, make sure it is correct to avoid delays in your application. The form includes 11 questions related to your salary, financial and personal information. You can even designate other people as reimbursement recipients.

The government website has a online verification servicewhich you can use here to see if you can claim your refund.

How long do I have to request a tax refund?

Wondering if there is a deadline to claim?

In terms of the self-assessment refund, you have four years to submit a claim for a tax refund or reduction. If yours needs to be corrected, the government website has more information on Self-assessment corrections.

If you are in a situation where you need to correct an error in your self-assessment tax return or request a refund (within 12 months), you can do so by completing an amendment via a letter to HMRC or via the website.

How to recover personal income tax

There is a form called R38 that you must complete if you have paid too much tax and want to claim the overpayment. You can also use this form to authorize a representative to collect the tax payment on your behalf. The government website has more details on claim tax refunds.

PAYE tax recovery

What is PAYE? If you’re not familiar with it, it’s the acronym for Pay As You Earn, which deducts tax from your salary before it’s paid into your account. This is possible if your salary changes during a tax year

you might end up paying the wrong amount. This could be because you were not employed for the full 12 months of the financial year. You can get an estimate of whether you paid too much tax this year with the HMRC Tax Check Tool Or this tool for previous tax years.

Recovery of self-assessment tax

HMRC uses a system called Self evaluation to collect income tax. This is often aimed at self-employed workers, but also at anyone who has received additional income, in one form or another, which is not declared to the tax authorities.

Can you retrieve the self-assessment? Yes and it’s completely free. A self-assessment tax return shows how much you earned and how you got that extra money in a tax year. Forms must be submitted and invoices paid by February each year.

For those who paid too much tax, you can request the refund via your tax return. HMRC will arrange your refund once they have processed your return.

Then you simply tell HMRC whether you want it paid by check, into your account, or deducted from the next tax liability.

Reclaiming Capital Gains Tax (CGT)

Do you think you paid too much CGT?

There is a cure here too. You can apply for what is called ‘overpayment relief’. You must make the request within four years of the end of the relevant tax year, telling HMRC in writing why you consider the overpayment or excessive contribution has occurred.

However, according to Tax Aid, there is “strict conditions regarding overpayment relief and it may not be available in all circumstances“. The charity also warns that “you will normally need professional advice to make a claim for overpayment relief”.

It is therefore best to speak to a qualified accountant to help you deal with such a claim. Check out our simple guide for more information on Capital gains tax.

Recover pension tax

Can we recover tax on pensions? Yes, you can claim a pension tax refund on a small lump sum of pension you received. How do you proceed?

The best option is to use HMRC’s online service (Government Gateway user ID and password required) or to print the relevant form and send it to them.

As with retreats in general, there are subtleties to be aware of. Anyone receiving lump sums for serious illness must use form P53Z to recover, within the year, any tax overpaid on these lump sums. The same form can be used if you have flexibly access your pension and I emptied your pot. Alternatively, for those who are only using part of their pension pot, or if you are not working or receiving benefits, you should use form P55 or form P50Z.

For the full list of forms and details regarding pension tax recovery go to this HMRC webpage.

How to claim overpayment of corporation tax

Maybe you run a business and discovered it was paying too much Corporation tax Last year? It is possible to recover it. In fact, you can even get interest at the rate of 0.5% from HMRC if you qualify for a claim.

How do you do? You must notify HMRC via your business tax return.

When will you receive interest? First, if you paid your taxes early (called “refund interest”) and second, if you paid more than your business owes (called “refund interest”). One thing to note: interest is taxable and you will need to include it as income on your corporate tax return.

Income tax recovery

You may be able, if you are working, self-employed or paying via PAYE, to get a tax refund (rebate) if they have paid too much income tax. In fact, you may have paid too much for one of the following and you will be able to claim a refund:

• pay for your current or previous job
• pension payments
• income from a life annuity or pension
• severance pay
• a self-assessment tax return
• savings or PPI interest
• foreign income
• UK income if you live abroad
• fuel costs or work clothes for your job

Recover National Insurance

Another aspect of the tax you pay is National Insurance. It may happen that you pay too much, but it is also possible to make a claim for this.

When could this happen? Scenarios include paying NI after reaching state pension age or after working in multiple jobs. There is an online government tool for request a refund of your national insurance contributions.

Recover VAT

Often you can reclaim VAT paid on goods and services purchased for use in your business, but not to some extent for personal reasons. For example, if half of your phone calls are private, you can reclaim 50% VAT on the purchase price and service plan.

Since 2019, most organizations must follow Making Tax Digital’s VAT rules, meaning they must keep digital records and use tax software to submit their returns.

How to claim tax relief for working from home

Many of us have had to convert our homes into offices during the pandemic. As the pandemic accelerates the shift to remote working, tax breaks are becoming increasingly relevant here too.

Indeed, if you have had additional costs linked to working from home, you can benefit from tax relief. But not if you choose to work from home. Items you could claim include:

• gas and electricity
• measured water
• business phone calls, including dial-up Internet access

It is important to note when claim tax relief for working from homeyou must claim only the part that relates to your work.

Conclusion

Various circumstances may require you to request a tax refund. This could be because you overpaid on your self-assessment or because your PAYE tax code was found to be incorrect for the year.

In each case, there are ways to submit your refund claim to HMRC, with a number of online tools available on the government website to make it quicker and easier. Please refer to the information above again for more details on the tax refund that applies to you.

OUR cloud tax and accounting software is perfect for preparing and filing accounts, tax and VAT returns MTD. We have a wide range of tax software to help you whether you are an individual or independent. You are not an individual or self-employed? Join thousands of accounting firms easily preparing their MTD deposit accounts, tax returns and VAT returns with our tax software for accountants.

By Alan Gregory | October 4, 2021 | 8 minutes of reading

Although most taxpayers understand that their income is subject to income tax, many are not sure how to treat the sale of a capital asset, such as property (that is not your house) or stocks. Additionally, changes to capital gains tax (CGT) reporting over recent years have further complicated matters and left many taxpayers confused.

You probably came across this guide while searching for the answer to the question “what is capital gains tax?” » This is probably because it was mentioned to you because you have just sold a valuable asset or are considering selling it.

Well, you’ve come to the right place as this easy to digest article provides a comprehensive overview of capital gains tax for UK residents, explaining what capital gains tax is , what assets it applies to, how much CGT is and who should do it. pay it.

What is capital gains tax?

Simply put, when you sell an item you own and it has increased in value, you may be liable for tax on the amount of the increased value. This tax is Capital Gains Tax (CGT).

Whether or not you have to pay UK capital gains tax on the sale of your asset will be determined by several factors which are discussed in more detail below.

Who pays capital gains tax?

You may be wondering if CGT is separate from income tax. Individuals pay income tax on their income (e.g. salary, profits from self-employment, rental income). Capital gains tax, on the other hand, applies to capital gains resulting from the sale of taxable assets. Common examples of taxable assets include stocks, property and land. CGT can apply both when an asset is sold and when it is gifted.

As UK resident taxpayers are generally subject to capital gains tax on their worldwide gains, sales of taxable assets abroad (e.g. an overseas rental property) are also subject to UK CGT on disposal.

Note that businesses do not pay capital gains tax. Instead, they pay Corporation tax on their taxable earnings.

Exempt assets

Not all disposals result in a capital gains tax liability. Let’s look at some examples of what is exempt from CGT.

One of the most common exemptions is the transfer of principal residence (where the property has been a taxpayer’s principal residence throughout their ownership and has not been used to produce income – e.g. example by renting it out or being used as a place of business).

Another well-known situation where CGT does not arise is where an individual transfers assets to their spouse or civil partner. Such transfers are generally considered to be at zero gain/loss.

Some asset disposals are also exempt from CGT – HMRC guidance provides a high-level summary.

How much is the capital gains tax?

Capital gains tax applies to the net increase resulting from the disposal of an asset. The amount of CGT you will have to pay depends on several factors which we will discuss.

How to calculate CGT

In its simplest form, CGT is calculated by taking the amount paid to acquire the asset and deducting this “cost basis” from the net proceeds resulting from the sale.

In practice this calculation can be more complicated, for example where an asset is being donated, capital losses are being claimed or where only partial private residence relief is available on a property sale. For more complicated situations, it may be helpful to seek professional advice.

Once the net gain has been calculated, the taxpayer must consider the annual exemption amount (AEA) available. The AEA is a CGT allowance, meaning that no capital gains tax is payable on gains that fall within the AEA.

Now you know how to calculate capital gains tax. If you think you overpaid, check out our guide to claim back tax.

What is the capital gains tax allowance?

The AEA threshold is currently £12,300 for individuals in 2021 (at the time of writing, October 2021). The government has confirmed that this rate will be frozen until April 5, 2026.

What percentage does the CGT represent?

The capital gains tax rate applicable to a transfer depends on the property and tax status of the seller.

When the property is a residential building, the CGT rate is either 18% or 28%. The 18% rate applies to basic rate taxpayers, while the 28% rate applies to higher and additional rate taxpayers.

In the event of a sale of other taxable assets, the CGT rates are lowered to 10% or 20% respectively depending on the taxpayer’s rate band.

Taxpayers can also access specific capital gains tax reliefs when certain conditions are met. Eligible assets may, for example, be eligible for Business Asset Disposal Relief (formerly Entrepreneurs’ Relief) which applies a CGT rate of 10% on eligible earnings up to a lifetime allowance of £1 million.

When do you pay capital gains tax?

The legal deadline for paying capital gains tax is January 31 following the tax year of the transfer.

If the taxpayer pays a deposit, the capital gain is not considered part of the POA. The full CGT balance is due by January 31.

Penny sells its shares in December 2021, realizing a net capital gain after the annual exempt amount of £30,000. Penny is a higher rate taxpayer, meaning CGT of 20% (£6,000) is payable. This amount must be paid no later than January 31, 2023.

The exception to this rule is the sale of residential property in the UK. In such cases, the disposal must generally be reported to HMRC and the associated CGT paid within 30 days of the sale being completed.

Declaration of transfers

If a taxpayer makes a taxable disposal, subject to limited exceptions, that disposal must be reported to HMRC.

This is usually done by filing a self-assessment tax return and completing the additional capital gains tax pages.

An individual sells an investment property abroad in January 2022 and realizes a net capital gain after all reliefs and allowances of £100,000. This disposal must be reported in their 2021-22 self-assessment tax return. The filing deadline is October 31, 2022 if you file a paper return, or January 31, 2023 if you file online.

If this is an individual’s first self-assessment return, the deadline to register for self-assessment is October 5 following the end of the relevant tax year.

Exceptions to transfers

However, there are certain exceptions. For example, a taxable gain below the AEA does not need to be declared.

If a taxpayer is not in self-assessment, or is in self-assessment and wishes to pay the CGT due on a disposal early, the Real Time Capital Gains Tax service can be used to declare capital gain on a disposal other than the United Kingdom. residential property.

If a taxpayer uses the Real-Time Service and (apart from the assignment) does not need to file a self-assessment tax return, then by declaring the gain via the Real-Time Service, no tax return should not be produced. Taxpayers who are self-assessment must still report the disposal on their tax return, even if they use the real-time service.

Declaration of transfers of property

There are additional reporting requirements to consider when disposing of a residential property in the UK.

For UK tax residents, the disposal of UK residential property (e.g. rental property) from 6 April 2020 must be reported to HMRC via Capital Gains Tax in the UK Property Account. The deadline for declaring the transfer and paying the CGT due is 30 days from the completion of the sale.

There are some exceptions for UK residents. Where a disposal of a UK residential property is exempt from CGT (e.g. the sale of the main residence) or where the disposal does not trigger any CGT liability through the AEA or use of capital losses , the disposal does not need to be declared via CGT on the UK property account.

However, this is not an optional declaration form; where a taxpayer meets the criteria, the disposal must be reported via CGT to a UK property account on time.

Where a taxpayer is not in self-assessment and (apart from disposal) does not need to file a self-assessment tax return, no tax return is necessary if the gain is declared via CGT to a UK property account. However, self-assessment taxpayers must still declare the disposal on their tax return, in addition to reporting the disposal via CGT on the UK property account.

10 key points to remember for the CGT

1. CGT can apply both when an asset is sold or given away.
2. The AEA (Annual Exempt Amount) is currently £12,300 for individuals in 2021.
3. One of the most common CGT exemptions is the transfer of the main residence.
4. Capital gains tax applies to the net increase resulting from the disposal of an asset.
5. Where the property is residential property, the rate of CGT is either 18% (for basic rate taxpayers) or 28% (for higher/additional rate taxpayers).
6. When other taxable assets are sold, the CGT rates are much lower, at 10% or 20% respectively.
7. The legal deadline for paying capital gains tax is January 31 following the tax year of the transfer.
8. Reporting disposals is usually done by filing a self-assessment tax return and completing the additional capital gains tax pages.
9. A taxable gain below the AEA does not need to be declared.
10. There are additional reporting requirements to consider when disposing of a residential property in the UK.

At IRIS, we understand how confusing tax can be, even for the most experienced people. Our area of ​​expertise is tax software which simplifies tax declaration for individuals and professionals. For help with CGT, look no further than our latest cloud solution, IRIS Elements.

By Alan Gregory | October 18, 2021 | 5 minutes of reading

It can be easy to get lost in all the jargon associated with tax returns, from trying to understand if a tax return is required, to deciphering when a tax return must be filed and any associated taxes paid.

This article provides a comprehensive overview of personal and business tax returns, answering key questions such as what a tax return is, when returns need to be submitted to HMRC and what changes are coming to tax returns. income.

Tax Returns Explained

Essentially, a tax return is a form which tells HMRC the amount of income a taxpayer should be assessed on in a tax year. A return also allows a taxpayer to include all eligible deductible expenses and make any relevant claims that may reduce their overall tax liability.

For income tax purposes, a tax year runs from April 6 to the following April 5. For Corporation tax To this end, a financial year runs from April 1 to the following March 31.

What is a professional tax return?

The answer depends on the type of business you run.
Generally, an individual can operate his or her business as a sole trader, through a corporation, or as a partner in a partnership.

Each of these types of entities reports its results for a tax year using different tax returns. Individuals report their income via self-assessment while businesses prepare corporate tax returns. The process for individuals and businesses is described below.

Self Assessment Tax Returns

Individuals file a “self-assessment tax return”. The SA100 form is the main part of the tax return, but other pages may be required depending on the taxpayer’s circumstances.

Examples of additional pages include those for employees or company directors (SA102), self-employed people (SA103S or SA103F), UK property income (SA105) and capital gains (SA108).

A full list of additional pages can be found here.

Corporate tax returns

A company prepares a corporate income tax return, known as a CT600. In addition to the CT600, there are additional pages for reporting additional items, from closed business loans (CT600A) to group relief (CT600C).

A corporation tax return is usually accompanied by a corporation tax calculation as well as a copy of the company’s accounts for that period.

Does everyone have to file a declaration?

In short, no. Not everyone is required to file a tax return.

Many people, for example, only earn employment income. Since a person’s salary tax is collected through Pay As You Earn (usually abbreviated to PAYE), these individuals generally do not need to file a tax return (unless they earn more than 100,000 £ per year).

However, some people have sources of income outside of their jobs. This could come from investment property, self-employment income, or dividend or interest income. These individuals may be required to file a self-assessment return.

If you need to file a return, you may feel comfortable doing it yourself, but an accountant can also do it for you. Take a look at our recent blog where we discuss when it’s worth hiring an accountant to do your taxes.

How do I know if I need to submit a request?

Those already in self-assessment receive a “Deposit Notice” from HMRC each tax year.

Those who are unsure whether they need to file a tax return can use HMRC’s toolcheck if you need to send a self-assessment tax return”, which can tell you if you need to file tax returns.

If you are new to self-assessment, you can register with HMRC here.

When it comes to businesses, a trading company must always file a corporation tax return, even if it is loss-making in a period and/or has no corporation tax. to pay.

When are business tax returns due?

The deadline for filing a tax return differs depending on the type of tax return.

For an individual filing an income tax return by self-assessment, the filing deadline is generally either:
• October 31 following the end of the tax year (if you file a paper return), or
• January 31 following the end of the tax year (if online declaration).

A person filing their 2020-21 tax return will need to lodge it with HMRC either by 31 October 2021 (if submitting a paper return) or by 31 January 2022 (if submitting an electronic return).

The filing deadline for a business is different. A corporation tax return must generally be filed with HMRC within 12 months of the end of the relevant accounting period.

A company prepares its accounts for December 31. She must submit her corporation tax return for the year ending 31 December 2020 to HMRC by 31 December 2021.

A quick word on payment deadlines

Don’t fall into the trap of thinking that income and corporate tax payment deadlines reflect tax filing deadlines. Learn more about pay income tax And Corporation tax.

Tax filing changes loom on the horizon

Finally, when it comes to income tax, it is worth keeping in mind that significant changes are on the horizon. Two important changes include tax digitalization for Income Tax (MTD) and base period changes.

Making tax digital for income tax

The MTD for income tax is expected to be introduced from April 6, 2024.

In short, the MTD regime for income tax applies to self-assessment income tax registrants whose qualifying income (i.e. earned income independent and/or owned) is more than £10,000.

Those covered by the scheme will need to use MTD compatible software to keep digital records, send quarterly updates of business income and expenses and submit a final return to HMRC.

MTD for Income Tax is designed to replace the traditional self-assessment tax return. Even if his term is only a few years away, it’s worth it become familiar with the diet (and maybe even join the pilot), to allow enough time for the transition.

Changes to the base period

Additionally, HMRC recently carried out a consultation on changing the way trading income is allocated between tax years by moving to a tax year basis. This change will mainly concern companies which do not prepare annual accounts by March 31 or April 5, as well as companies at the start of their activity.

Although this change is not expected to take effect until April 2024 (and with a transition year not taking effect until 2023), it is essential to understand these changes if your business is affected.

We have now answered the question “What is a tax return?” » – you may want to know how to easily file returns for your business. We advise you to research the best software for you. While you’re here, why not start by taking a look at our tax return software which helps both individuals and accounting firms. Prepare tax returns for all types and sizes of businesses, from sole proprietorships to partnerships, corporations, trusts and estates.