Chapter 13 - Administration of tax

Individuals are required to file a self-assessment return if they have

• self employment income >£1000

• other untaxed income ≥ £2500

• claims for tax relief for employment expenses ≥ £2500

• income from savings or investments >£10000 (below this level HMRC will seek to collect tax through PAYE)

Any taxpayer with liability to income tax or capital gains tax must notify chargeability before

• 5th October following end of tax year

Who files a short tax return

• Non-directors (employees)

• pensioners

• sole traders with turnover <£90,000

Who files a full tax return

• Taxpayer may choose to continue to submit a full tax return (voluntary)

• Not a requirement unless HMRC require

Time within which HMRC can amend a taxpayers’ return for obvious errors

• 9 months of the actual filing date

Time within which the taxpayer can amend their return for obvious errors is the later of

• 31/01 after end of tax year

• 3 months after return was issued

Usual deadline (paper return)

• 31 October 2025

Deadline for paper returns issued after 31st July

• 3 months extension from issue of return

Deadline for online returns

• deadline for filing tax return is 31st January of following calendar year

When a return may be amended

• within 12 months of when return should have been filed

• i.e. a return relating to 2023/24 should be filed by 31st January 2025, amendment myst be made by 31st January 2026

When is capital gains tax paid

• 31st January 2026

• paid along with tax return

Class 4 NIC and income

• made with POA and balancing payments

1st payment on account is paid

• on the 31st January in tax year

• 2024/25 - 31st January 2025

2nd payment on account is paid

• on 31st July (6 months later)

• 2024/25 - 31st July 2025

Balancing payment is paid

• 31st January 2026

How payment on account is calculated?

• half of income tax and class 4 NIC paid under self assessment for the previous year (i.e. not paid at source)

Unpaid tax due can be collected if the paper return is filed by

• 31st October after tax year

Unpaid tax due can be collected from employees if online return is filed by

• 30th December

What happens to late POAs and balancing payment

• Subject to interest from due date to day before payment

  • Balancing payment - potentially liable to penalty

  • Where BP is paid >30 days late - 5% penalty + interest

  • Where BP is paid >6 months late - further 5% penalty + interest

Tax liability is the sum of

• Both POAs + balancing payment

Interest on late paid tax

Payable on any late paid tax

• late balancing payments

• late POAs

• penalties

• surcharges

Runs from due date of payment to day payment is made

Interest on overpaid tax

• repayment interest is payable by HMRC on overpaid POAs, balancing payments and penalties

• Runs from original date (or due date if later) of payment to day before payment is made

• Repayment interest is exempt from income tax

Company must notify HMRC of chargeability

• within 3 months of start of their 1st accounting period

• must notify HMRC that it has taxable profits within 12 months of an end of an accounting period

Within how many months can a company amend their return

• 12 months of normal due date

When a CT600 (full corporation tax return) must be submitted

• within 12 months of end of period of account

When can a company make claims for overpayment (overpaid corporation tax)relief

• within 4 years of the end of the accounting period

Corporation tax dates (Standard)

• Threshold - Augmented profits ≤ £1.5m

• Payment dates - 9 months and 1 day after end of accounting period

Corporation tax dates (Large companies)

• Threshold - £1.5m < Augmented profits ≤ £20m

• Payment dates - 14th of months 7,10,13,16 of the accounting period (quarterly)

Corporation tax dates (very large companies)

• Threshold - Augmented profits > £20m

• Payment dates - 14th of months 3,6,9,12 of the accounting period

Corporation Tax - interest

• runs from the date the tax should’ve been paid until its actually paid

• is an allowable in NTLR

Corporation tax - repayment interest

• on overpaid corporation tax runs from the later of the date the tax was originally paid and the date the tax was due to be paid

• is a taxable NTLR credit

FPS (Full Payment Submission) is submitted

• on or before payday

• employer must pay their PAYE and NICs liabilities normally electronically by 22nd of the month following payroll month

P11D

• End of year form details benefits to employees which haven’t been dealt with via voluntary payrolling

  • Send to HMRC and copy to employee by 6th July after tax year has concluded

  • i.e. P11D for 2024/25 - would need to be submitted by 6th July 2025 (after 5th April 2025)

P60

• End of year form recording details of gross pay, tax deducted and NICs for both employer and employee

  • Supply to each employee by 31st May after tax year has concluded

  • i.e. P60 for 2024/25 - would need to supply by 31st May 2025 (after 5th April 2025)

P45

• Particulars of employee leaving - records tax code, gross pay to date, tax and NICs deducted

  • given to employees for his own records

  • leavers information is supplied to HMRC until RTI

Late submission of P11D return

• An extra £300 penalty per late return - plus £60 per day if delay continues

Late submission of FPS forms

• Additional 5% penalty on tax and NIC that should’ve been reported

VAT return is due

• 1 month and 7 days after end of return period