Tax returns are a hassle for every business owner but of course, they must be completed. Whether you have little experience with the HMRC or you are struggling with tax returns, our step-by-step guide can help.
Coleman & Co can complete tax returns on behalf of any business. We are always happy to offer our support throughout Lisburn and the surrounding areas.
When Tax Returns Should Be Completed
There are several situations where you may have to complete tax returns and there are two possible deadlines for when these must be completed. Not everyone has to complete a tax return, however, this must be done if you are:
- Company Director
- Self Employed
- The Highest Earner in a Family Claiming Child Benefits When Earning Over £50,000
- Earn £100,000 a Year or More
- Earn £2,500 or More in Untaxed Income
- Have Savings or Investment Income of Over £10,000
- Receive Income From Abroad
This obviously won’t apply to everyone but it is important you keep track of whether you should be completing self-assessment tax returns. Your taxes must be completed by 5th October 2019 if you file your tax returns through paper. If you choose to complete tax returns online, this gives you until the 31st January 2020. This gives you plenty of time to submit 2018/2019 returns, regardless of how much tax you owe.
Your tax year started on 6th April 2018 and will finish on 5th April 2019.
What To Fill Out
The confusing part often comes from business owners and self-assessors not understanding what to complete. Your tax returns can often be quite simple, especially if your annual turnover is less than £85,000. This is the current VAT threshold for the 2018/2019 tax year. If this is the case for you and your business, only the ‘short tax forms’ must be completed.
Unfortunately, if your turnover was over the £85,000 VAT threshold, you must complete the “full tax forms”. As tax returns can be completed both online and through paper forms, we strongly advise doing this online. This a much quicker and efficient way of completing tax returns and makes it easier for you to accurately submit tax returns using the correct forms.
All businesses with a taxable turnover above the VAT threshold must use digital tax forms from 1st April 2019. Preparing yourself for this change is essential and using online tax forms is the best way to do this.
Personal Income Tax Returns
Working out how much tax you need to pay for your income is a simple process. Everyone gets a personal allowance of £11,850. Until you earn more than this, you should never have to pay any tax to the HMRC. However, if you still owe money from previous tax years, this will still have to be paid.
From £11,851 to £46,350, you will pay 20% tax on your salary. From £46,351 to £150,000, this will mean you pay 40% income tax. Anything upwards from £150,000 will demand a whopping 45% tax returns. Whilst this may be a large amount, unfortunately, you will always have to pay taxes whether you are a business owner or completing taxes for employees or completing self-assessments.
Deadlines & Penalties
If you miss the initial deadline for your self-assessment tax return, you will receive a penalty of £100. It is important to make amendments quickly to submit accurate taxes. Every day after the initial fine will give you £10 extra charge.
Whilst this may not seem like a lot of money, this can build up to a maximum of £900, so best to get your taxes completed correctly the first time around! As previously mentioned, the tax return deadline for paper forms is 5th October 2019. If you fail to meet this deadline, the final online tax returns give you until 31st January 2020.
If you require any more information on tax returns or require advice, contact Coleman & Co. We can help all businesses in Lisburn and the surrounding areas, as well as completing your tax returns ourselves. Call our team today on 028 9266 3599 or fill in our contact form to make an enquiry.