The end of year tax return deadline is approaching, for those who are filing electronically, it is the 31st of January 2018. The payments on account deadline are the same.
If you are approaching the filing deadline and you don’t have all the information you need to complete the tax return, you can file a provisional tax return to avoid having to pay a penalty. The provisional figures should be clearly identified as such, and it is helpful to provide a reason for the use of the provisional figure and give an approximate time when the final figure is likely to be available. Once the correct figure is available, HRMC should be notified without delay.
Apart from giving a compulsory report on the business, it is also a good opportunity to take a look at how the business is performing and compare it to the previous years’ reports and to the targets we have set for ourselves.
Small businesses may be liable to reduce their tax liabilities through tax reliefs, such as charitable donations.
Losses need to be recognised as well because they can also reduce the tax liability.
Don’t leave submitting your return to the last minute, and once the tax return is complete, make sure you actually submit it.
As per the policy paper published by HRMC, the VAT threshold is remaining at £85,000 for 2 more years from 1 April 2018. The taxable turnover threshold which determines whether a person may apply for deregistration will remain at £83,000.
It is the highest threshold in the EU, keeps over 3 million businesses out of VAT, but it also distorts competition between businesses which have to charge VAT and those who don’t. The government is looking to consult on the design of the VAT threshold during the two year period ending in March 2020.
There will be some changes coming from April 2018 with a new system: Making Tax Digital for Business system. Businesses, self-employed and landlords will require to start using the new digital service from April 2018 for income tax and National Insurance contributions purposes if their turnover is over the VAT threshold. Those, who are below the threshold will be required to use it from April 2019. From April 2019 we will be required to use it for VAT purposes and from April 2020 for Corporation Tax purposes.
Businesses, self-employed people and landlords with turnovers under £10,000 per year will be exempt.
The reforms are anticipated to take out around 10% of error on an ongoing basis, and give businesses a clearer view of their tax position in year , enabling them to plan to meet their tax obligations at minimum cost and minimum disruption.