Tag: UK Tax Year

The current tax year is from 6 April 2022 to 5 April 2023

UK tax diary for october and november 2023, farringdon accountant

Key UK tax dates for October and November 2023

by James Browning, posted in Blogs, General

How to claim work from home tax relief in the UK

As we step into the final quarter of the year, it’s vital to stay ahead of the impending UK tax deadlines to ensure a smooth end to the financial year. Below, we have listed the crucial tax dates for October and November 2023 that UK businesses and individuals need to keep in mind.

October 2023

1st October 2023

  • Corporation Tax – Companies with a year-end of 31st December 2022 must ensure their Corporation Tax is settled by this date. Meeting this deadline is critical to avoiding penalties.

19th October 2023

A critical day with multiple deadlines, take note of the following:

  • PAYE and NIC deductions – The deductions due for the month ending 5th October 2023 should be completed. If you are paying electronically, you have until 22nd October to settle these dues.
  • CIS300 Monthly Return – The filing deadline for the CIS300 monthly return for the month ended 5 October 2023.
  • CIS Tax – Ensure to settle the CIS tax deducted for the month ended 5th October 2023.

31st October 2023

  • Self-Assessment Tax Return – This is the last date to file a paper version of your 2022-23 self-assessment tax return. Don’t miss this to avoid potential late filing penalties.

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November 2023

1st November 2023

  • Corporation Tax – Businesses with a year-end date of 31st January 2023 must ensure to pay their Corporation Tax by this date.

19th November 2023

Mark this date for several important submissions:

  • PAYE and NIC deductions – Due for the month ending 5th November 2023. If you are planning to settle this electronically, the due date extends to 22nd November 2023.
  • CIS300 Monthly Return – File the CIS300 monthly return for the month ended 5th November 2023 by this date to remain compliant.
  • CIS Tax – The CIS tax deducted for the month ended 5th November 2023 should be paid by today.

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Important Corporation Tax Deadlines You Need to Know

by , posted in Blogs, Corporation Tax

Important Corporation Tax Deadlines You Need to Know

As a business owner in the UK, staying on top of your financial responsibilities is crucial, and one of the key obligations is filing your corporation tax return accurately and on time. In this blog post, we will delve into the important deadlines associated with corporation tax, including the filing of tax returns and when you will have to pay corporation tax instalments. Understanding these deadlines is essential to avoid penalties and ensure compliance with HM Revenue and Customs (HMRC).

When are corporation tax returns due?

As a business owner in the UK, staying on top of your financial responsibilities is crucial, and one of the key obligations is filing your corporation tax return accurately and on time. In this blog post, we will delve into the important deadlines associated with corporation tax, including the filing of tax returns and when you will have to pay corporation tax instalments. Understanding these deadlines is essential to avoid penalties and ensure compliance with HM Revenue and Customs (HMRC).

 

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what is a corporation tax accounting period?

An accounting period is a period for which a company prepares its financial statements. It usually aligns with the company’s financial year, which may or may not be the same as the calendar year.

Accounting periods differ as companies are set up and begin trading at different times of year. Accounting periods generally cannot be longer than twelve months, though there may be exceptions in the first year of business or when restarting a business. 

To check your accounting period, you can refer to your company’s annual accounts, which will indicate the start and end dates of your financial year. Alternatively, you can access this information from Companies House or consult your accountant for assistance.

 

When do i need to pay corporation tax?

Aside from filing your tax return, it is crucial to meet the deadlines for paying your corporation tax bill. The deadline for payment depends on your company’s size, with most companies falling into one of the following categories.

Small companies

If your company qualifies as a small company, with profits below £1.5 million, the deadline for paying your corporation tax bill is typically nine months and one day after the end of your accounting period. For example, if your accounting period ends on 31st December, the payment deadline would be 1st October of the following year.

Large companies

For larger companies with profits above £1.5 million, the corporation tax payment deadline is generally divided into four quarterly instalments. The first instalment is due six months and 13 days after the start of your accounting period, while the last three are due every 3 months thereafter.

It is important to note that these deadlines may vary depending on certain circumstances, such as companies with different accounting periods, accounting periods shorter than 12 months, or if your company’s taxable profits exceed £20 million.

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Working with a professional accounting firm like CIGMA Accounting can provide numerous benefits for your business. Not only can they help you stay on top of tax deadlines and avoid penalties, but they can also provide valuable financial advice and support.

Our experts at CIGMA are CIMA-registered Management Accountants. They specialise in working with businesses to form companies, create strategies, and making sure you’re on the right side of financial regulation.


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Appealing Penalties

Can I appeal my HMRC Penalties?

by cigma, posted in Blogs, FAQ, General, HMRC notices

The short answer is yes, you can appeal your HMRC penalties provided you have adequate evidence to support your appeal. The HMRC can raise various penalties including failure to pay/file and failure to notify penalty. If you find yourself in this situation and you’re wondering “How do I fight the HMRC” you have found the right place to help you.  The HMRC leaves ample room for individuals (Self Assessments) and corporations (Corporate tax and VAT returns)  to appeal against a penalty, it is just about understanding the process to make use of it.

Which Penalties can I Appeal?

The good news is that if you have done your due diligence and took reasonable care to have your tax returns done accurately and timeously, it is pretty straightforward. The HMRC will most likely be lenient and reduce your penalty by 100% if you can provide proof. Some of the penalties you can appeal against include:

  • An Inaccurate return from HMRC
  • Late Filing Fee
  • Making tax payment late
  • Failing to Keep Adequate Financial Records

 

This applies to almost all penalties (individual and corporation) that are raised by the HMRC. But what is considered a reasonable excuse?

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Reasonable Excuse to get out of hmrc penalty

We recently posted a blog where we go into a few ways you can reduce your HMRC penalty: How can I reduce my HMRC penalty. A quick summary of what they considered a reasonable excuse is provided below: 

  • Emergency hospitalisation 
  • Death of a loved on (Partner or close relative)
  • Serious or life-threatening illness
  • Computer or software failure while submitting or filing tac returns
  • Service issues with HM Revenue and Customs (HMRC) online services
  • Natural Disaster or unplanned circumstances (Fire, flood or theft prevent)
  • Postal delays that you could not have predicted
  • Delays related to a disability or mental illness you have
  • You were unaware of or misunderstood your legal obligation
  • You relied on someone else to send your return, and they did not

Time Limits on Appealing the HMRC penalty

If you have notified the HMRC that you wish to appeal the penalty, they will send you a letter offering a review. You have two options moving forward, either allow the HMRC to review the penalty and circumstances surrounding it (usually takes around 45 days, but they will inform you if it will take longer) or you can appeal straight to the tax tribunal.

The tax tribunal requires you to inform them of your intention to appeal your penalty within 30 days of the letter of review being delivered to you. The tax tribunal usually takes a lot longer to resolve the appeal. We would also like to draw your attention to the fact that you can request a review from the HMRC, and if you are not happy with the outcome, you can then move on and submit an appeal to the tax tribunal to dispute the outcome of the HMRC.

Penalty Appeal Procedure

CIGMA'S SUCCESS RATE WITH HMRC Penalty appeals

CIGMA Accounting is a London based accounting firm with offices in Farringdon and Wimbledon. Our team of accountants have over 16 years of experience and appealing penalties is no exception. Over the last 6 years CIGMA has a 90% success rate in getting penalties reduces or completely removed. 

 

We are so confident that we can help clients reduce their liabilities that we work on a “no win, no fee “policy. If we cannot get your penalty reduced, we will not charge you. If you want to take advantage of this offer you can contact us below:


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How you appeal for a penalty is dependent on which type of penalty you are appealing. You can see a list of the required forms to appeal below: 

However, if you prefer submitting appeals by post you can do so using the following forms:

  • For self assessment penalties you are required to complete a SA370
  • Partnership for late return complete form SA371. (Note that only the nominated partner can appeal. 
  • Filing a late VAT return (provided you have a reasonable excuse)
  • Company tax return delayed by technology failure


You can submit these by sending them to the following address:
Self Assessment

HM Revenue and Customs

BX9 1AS

United Kingdom

Autumn Finance Bill published

by cigma, posted in General

The government published the Autumn Finance Bill 2022 on 22 November 2022. The Bill is officially known as Finance Bill 2022-23. The Bill contains the legislation for many of the tax measures announced in the recent Autumn Statement.

The Autumn Finance Bill will be followed by the main Spring Finance Bill 2023 which will be published after the spring Budget and will cover any remaining tax measures needed ahead of April 2023. Summary of most important changes to the UK Finance Bill is summarised in the following infographic. 

UK Finance Bill Updates

Some of the many measures included within the Bill are:

 

  • The Energy Profits Levy (EPL) will increase to 35% (from 25%), effective 1 January 2023. The investment allowance will be reduced from 80% to 29% for qualifying investment expenditure thereby maintaining its existing cash value.

The government introduced the Energy (Oil and Gas) Profits Levy in May 2022 to respond to exceptionally high prices that mean oil and gas companies are benefiting from extraordinary profits.

European and UK wholesale gas prices reached record highs this year and are expected to remain significantly elevated for the foreseeable future. This is driven by global circumstances, including resurgent demand for energy post COVID-19 and the invasion of Ukraine by Russia.The proposed changes are not expected to have any significant impact on individuals, households and families. In contrast, around 200 companies operating in the UK will pay more tax, however, they will be able to claim additional tax relief through the Energy Profit Levy's investment allowance.

 

  • The Income Tax additional rate threshold will be reduced from £150,000 to £125,140 with effect from 6 April 2023

This change will be implemented to support the government's objective of putting the public finances on a sustainable path in a way that is fair, with those on the highest incomes taking on a larger burden. These changes will apply on all income including non-savings, non-dividend income, for taxpayers in England, Wales and Northern Ireland. This will also apply to the savings rates, dividend rates and the default rates which apply for taxpayers across the UK. These changes will not affect Scottish taxpayers. These changes will affect around 792 000 UK taxpayers in April 2023, with more men than women being affected by the changes. 

 

  • The current £2,000 dividend tax-free allowance is to be reduced to £1,000 from April 2023 and to £500 from April 2024.

The dividend allowance is not always an addition to the personal allowance. Sometimes it uses up part of the personal allowance. It should always be remembered that the personal allowance applies to all income. If the taxpayer has income from other sources, only one personal allowance may be claimed.  For a detailed explanation, yuo can visit the HMRC website.

  • Vehicle Excise Duty (VED) will become payable on new electric cars, vans and motorcycles from April 2025 in the same way as it currently applies to petrol and diesel vehicles. This change will apply to new and existing zero emission cars.

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  • The Income Tax thresholds will be maintained at their current levels for a further two years until April 2028. The higher rate threshold will remain frozen at £37,700 and the personal tax allowance will remain at £12,570 through to April 2028.

 

  • The Research and Development Expenditure Credit (RDEC) rate will increase to 20% (from 13%) with effect from 1 April 2023.
  • Small and medium-sized enterprises (SME) additional deduction will decrease from 130% to 86% effective from 1 April 2023.
  • The SME credit rate will decrease from 14.5% to 10% effective from 1 April 2023.
Source:HM Treasury| 28-11-2022
Assessment Changes

Basis of assessment changing

by cigma, posted in Business

Forthcoming ‘basis of assessment’ reforms will change the way trading income is allocated to tax years for the self-employed. The changes will affect sole traders and partnerships that use an accounting date between 6 April and 30 March. There is no change to the rule for companies.

The reforms will change the basis period from a ‘current year basis’ to a ‘tax year basis’. Under the current rules there can be overlapping basis periods, which charge tax on profits twice and generate corresponding ‘overlap relief’ which is usually given on cessation of the business. The new method of using a ‘tax year basis’ will remove the basis period rules and prevents the creation of further overlap relief.

The new rules will come into effect in the 2024-25 tax year with 2023-24 being a transitional year. During the transitional year, all businesses’ basis periods will be aligned to the tax year and all outstanding overlap relief can be used against profits for that tax year.

Affected businesses in 2023-24 will be assessed on the tax for profits for the:

  • 12-month accounting period they have previously been using; and
  • for the rest of the 2023-24 tax year — minus any overlap relief that may be due — spread over the next 5 tax years.

The changes do not affect sole traders and partnerships who already draw up annual accounts to a date between 31 March and 5 April.

Affected businesses should ensure they are prepared for the changes as there may be cashflow implications. 

Source:HM Revenue & Customs| 14-11-2022