What are the Limited Company VAT Return Due Dates (Submission), Penalties, and Payment Deadlines to HMRC to Avoid Late Filing

What is my first VAT return period end date?

If you are submitting VAT returns, you should be clear on the following dates:

  1. The deadline for submitting your online VAT return to HMRC
  2. The due date for any VAT payments you owe to HMRC
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The deadlines for filing online VAT returns vary from business to business, but they are always at the end of a month. The only exception is when you are filing your last return while deregistering. There are 12 months in your VAT accounting period. You can decide which month you want to report your VAT payments when registering.

See the VAT calculator below to determine when your VAT return is expected.

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How to Check Your HMRC VAT Quarters

When logging into your HMRC Government Gateway Business account, you will be presented with a summary dashboard. This will show you your VAT account and records for the year and quarter. The amount owed as well as details about past and upcoming payments will all be shown.

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What Dates are VAT Returns Due?

The VAT scheme you have selected to enrol in and the VAT period you choose when registering will determine the filing deadline for your return. Quarterly, monthly, or yearly returns for VAT are required. Quarterly VAT return dates are due for submission 1 month and 7 days after the end of a VAT quarter. Annual VAT returns are due two months after the end of your VAT period.

On What Date Does HMRC Take the VAT Payment?

Payments for monthly and quarterly VAT returns are due on the same day as the submission deadline. Therefore, one month and seven days following the end of the VAT period, both the VAT return and the VAT payment are due.

There are monthly VAT payment deadlines for annual accounting that are established by HMRC upon joining the program. At the end of the VAT period, a final VAT payment is then due, along with the VAT return, and any under- or overpayments are then determined by HMRC.

What Months Are VAT Quarters?

The most common set of quarterly VAT return dates are:

January 1st to March 31st

April 1st to June 30th

July 1st to September 30th

How Long Does It Take for HMRC To Pay a VAT Return?

Returns are typically made 30 days after HMRC receives your VAT return. If HMRC has your bank information, your repayment will be sent directly to your bank account. If not, HMRC will mail you a cheque which is often referred to as a “payable order.”

What Happens If the VAT Return is Submitted One Day Late?

Currently, there is no penalty for submitting a VAT return after the deadline; however, there is a 10% fine for paying VAT after the cut-off date.

Do HMRC VAT Accounts Accept Same Day Payments?

Even on weekends and bank holidays, Faster Payments (online or telephone banking) payments typically arrive at HMRC the same day or the next. If you pay through CHAPS during your bank’s processing hours, your payment will often reach HMRC the same working day. Typically, BACS payments take up to three business days.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

What Documents Are Required for Voluntary/Mandatory Threshold VAT Registration Application/Form With HMRC?

How To Register for VAT?

Tax is a lifeblood of the government as this is needed for the implementation of projects, salaries of public workers, and the betterment of a country. One source of tax imposed by any government is the value-added tax or VAT which is a tax charged on any good and service bought by the consumers. That’s why it is important for business establishments to register for VAT and this article helps you with the process and what are the documents required for registering for VAT with HMRC.

You can register for VAT online or through paper form by using an agent. If you will register online, you will create a gateway account or VAT online account. This is needed for you to submit your VAT returns to HMRC or HM Revenue and Customs. if you’ll be using an agent, you will need to appoint an agent or an accountant to work on your behalf to submit VAT returns and make deals with HMRC. This process will still require you to finish your registration online even if you start with a paper form.

How Much Does It Cost?

There is no registration cost and it is free for the whole process if you register for VAT using the HMRC website. But when you file for your VAT return, there are options for doing it that may add to your costs. One optional way is if you have an accountant who will work and complete your return, there’s a fee as payment for their rendered professional services. But if you want to file a VAT return on your own, one online helpful tool is to use quality accounting software. These two options will make sure that you are following the rules or compliant with MTD or Making Tax Digital legislation wherein compels all businesses in the UK to keep their digital records of VAT accounting that was released last April 2022.

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What Are the Needed Documents and Records?

These are the following important documents you will be needed for you to register for VAT:

  • Incorporation certificate (incorporation details)
  • Business bank account details
  • Associated business details within the last 2 years
  • Business details that have been transferred or acquired, if needed.

Can You Register for VAT with a Paper Form?

Yes, there are various instances that you may register VAT using the form (VAT1) that is downloadable online from the official website of HMRC. These instances include:

  • if you need to apply for a registration exception
  • you are registering various business or division units under different VAT numbers
  • you are joining the AFRS or Agricultural Flat Rate Scheme

However, if you start registering for VAT with a paper form, still you need to complete this process online.

VAT Online Registration

All VAT-registered new businesses are required to pass or submit their VAT payments and VAT returns electronically as HMRC is now paperless in this regard. All business owners in the UK can register online for VAT using the HMRC website unless they are trading internationally or in other unusual circumstances. If you’re in a partnership business or as a business group, the nominated partner can use the online system of HMRC to register your business as long as your using a single or one VAT number. For you to have an access to their online services, you need to register for a government gateway account first at the HMRC site.

Is It Possible To Register for VAT Without a UTR Number?

To register for VAT, an NI or National Insurance number or your tax identifier UTR or Unique Taxpayer Reference business details you owned within the past 2 years.

Is It Possible To Register for VAT Without a Bank Account?

Once you have hit the £85,000 vat threshold, you will have to register for vat and must have a separate bank account.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Where Do I Find My PAYE Employer Reference Number (ERN) on my Payslip or P60?

What is an employer’s PAYE Reference number?

The HMRC or Her Majesty’s Revenue and Customs designates a Pay As You Earn (PAYE) reference number for every employer with a business that’s registered with the HMRC. It is a unique set of numbers and letters that’s composed of a three-digit HMRC office number as well as a unique set of numbers as a reference to the registered business. The PAYE reference number will look similar to 123/A56789 or 123/AB56789 but may come with minor differences.

The PAYE is HMRC’s income tax collection system that will aid in the funding of basic services such as education and healthcare. It also aids in funding the National Insurance which delivers certain benefits including the State Pension of employees. As an employer, you will need your PAYE reference number for various reasons, and completing your end-of-year PAYE Returns is one of your obligations to support the system that you’re part of. It is also expected that you will have employees asking for the PAYE reference number as they may need it as a requirement in tax credits application and in applying for student loans.

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Where can I find my PAYE reference without my P60?

If you’re an old employee, then you can easily find your PAYE reference number on your P60 (End of Year Certificate). It is an annual statement given to taxpayers who have successfully completed a tax year. For those who have already resigned from their jobs, their PAYE reference number can also be found in the P45 which is a form given by their employers upon resignation.

If you’re an employer, you will find the PAYE reference number on the welcome pack provided by HMRC after you register your business with them. In case you can’t find your welcome pack. you may always go back to the emails sent by HMRC as it will also include your PAYE reference number.

If all else fails, employers can always contact HMRC by phone or in writing to request the PAYE reference number.

Where can I find PAYE reference number on my payslip?

Search for your name and payroll number in the payslip and you will easily see the PAYE reference number.

Is PAYE reference number same as payroll number?

The PAYE reference is different from your payroll number because the former is used for the deduction that has to be made to pay your income tax while the latter is used to document the total calculation of your pay.

How long does it take to get a PAYE reference number?

A PAYE reference number can take up to five (5) working days to be processed. If you need to pay your employees before your PAYE reference number was released, you may do so via payroll then simply submit the documents to HMRC.

Is my tax reference my PAYE number?

Yes, both the tax office reference as well as the PAYE reference are one and the same.

Is PAYE reference number same for all employers?

No, the PAYE reference is a combination of numbers and letters that is unique to each employer.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Self-Employed Uber Eats Delivery Drivers Accounting for Taxes

How do I pay taxes as a self-employed driver?

Signing up as an Uber Eats Driver means that you do not primarily work for the company but you work with the company by yourself. This is not similar to regular full-time employment where you get payslips and benefits. Working by yourself and for yourself comes with these aspects:

You are responsible to find your own servicing gig and clients. Uber is just the sole platform where you can look for work opportunities.

You can decline or accept a job or an order according to your availability with regard to time, distance, or costs.

As an Uber Eats Driver, you are required to have your own vehicle, delivery equipment, and mobile phone to operate the application and transact with customers.

As you are not fully employed with the company, you can decide anytime when you want to work, and you are not entitled to sick pay, holiday pay, or leave pay.

You must be physically, mentally, and emotionally qualified to do the job scope

Uber Eats does not give its freelancers insurance, so you need to purchase it on your own.

What is a Self-Assessment?

The HMRC-created self-assessment enables anyone who gets untaxed income must file a government report and settle any tax liability.

Since you work for yourself as an Uber Eats Driver, no taxes are taken out from any payments you receive from customers and all of the orders. However, you are obliged to inform or report your earnings to HRMC of all the transactions to calculate your tax liability and make the necessary payments. In order to complete a tax return, you may accomplish this by signing up for self-assessment.

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What is a Tax Return?

An HMRC form is known as a Tax Return or SA100. You must submit several filled-out various sections of the form to indicate and report your profits and income. Following the completion, HMRC determines the tax dues so that you may pay them.

Tax Returns should be filled and filed on or before January 31st of the year, containing the summary of your earnings for the previous year period which runs from April 6th to April 5th of the following year. Therefore, if your file on January 31st, 2023, your tax return should include the summary of your earnings from April 6, 2021, to April 5, 2022.

How Much Tax You Pay On Uber Earnings

You pay taxes even when you are self-employed. These taxes are in a form of income taxes under the categories Class 2 and Class 4 national insurance of the profits for drivers. You can claim a tax deduction which is equivalent to the amount you get when you deduct your expenses from the sum of your all profit amount.

Meanwhile, tax calculations are about 20% of your total income including your income from UBER Eats and other income sources you have. At least 20% for those who have an income threshold of over 12,570.00 while 40% for those who earn more than 50,720.00. When your Uber income exceeds 6,5725.00, Class 2 National Insurance is paid as a fixed weekly sum, and Class 4 National Insurance is calculated as 4% if your earnings are over 9,880.00.

In this article, you can learn more about self-employed tax and find examples of how to calculate and when to pay it according to your current employment status.

How to Register as a Self-Employed Uber Driver

When your income from UBER Eats exceeds 1,000 within a tax year, you can register as an employed individual with HMRC as a self-employed. The registration deadline is the fifth of October after the end of the tax year in which you began working as a driver or the date on which your earnings are over 1,000.00.

There are several companies that offer tax assistance and tax savings if you work with companies like UBER Eats. Somehow, it may also depend on how much your earnings amount is. You can find out some popular UK business structures by reading these guides

Do Uber drivers need an accountant?

Accounting for Uber Drivers to keep them Stress-free

Do UBER Drivers need accountants for their tax files?

Yes, after working unbelievably stressful hours and times of the day, UBER Drivers should get an accountant to handle their finances and tax files to make sure they file the self-assessments correctly on time, and with technicalities.

What accounting method should be used for UBER Driver self-assessment?

Tax calculation can be done between the Cash method or the Accrual Method. The Cash Method is implied when you immediately report your income amount upon receiving and your expenses upon paying.

Hence, these are the following expenses that are allowed for UBER Drivers’ vehicles expenses to claim for their tax deductions:

  • Car or vehicle-related purchases
  • Car lease/ monthly payments
  • Business mileage
  • Uber commissions and service charges
  • Any costs incurred as part of the Uber application process
  • Tolls and Parking charges
  • Mobile phone & data
  • Car cleaning and valeting

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Find out more with our more with our services for:

Architect accounting services 

Self assessment tax return services

Doctor accounting services

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Can you Invoice without a unique tax reference (UTR) Number?

What exactly is a Taxpayer Identification Number?

When dealing with tax authorities, it will be necessary to provide a 10-digit number known as a Unique Taxpayer Reference, or UTR for short.

It’s like having a passport or Social Security number; it helps you stand out from the crowd, or in this instance, other companies, inside a certain system.

HMRC issues a UTR number to everyone who signs up for Self-Assessment. If you’re running your business as a sole proprietor, you only need one UTR, but if you’re in a partnership, each partner needs their UTR, and the business itself needs one, too. A director’s UTR number is distinct from the company’s and is used for filing individual Self-Assessment tax returns.

Click here to assess if you meet the criteria for self-employment and require registration with HMRC.

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Do you need a UTR to issue invoices?

Invoices shouldn’t include your UTR number. UTR, CRN (Company Registration Number), and VAT Registration Number are often used interchangeably, leading to misunderstandings.

UTRs are very private bits of information, in contrast to your physical address and phone number, which must be shown on all correspondence and your website. That’s why sensitive information like that has no place on an invoice.

Although some contractors who work independently mistakenly assume they must provide their UTR number in place of a firm registration number do so nevertheless, this is not the case. Never think of them as synonyms since they aren’t.

Remember that your Unique Taxpayer Reference is optional information for your clients and consumers. It would be best if you gave careful consideration to anyone you want access to your UTR since it contains sensitive information regarding your tax returns.

Should I tell anybody else about my UTR?

Aside from your accountant, financial adviser, or HMRC, no one else has to know your UTR number. If you are a subcontractor, your UTR must be made available to the prime contractor (so they can deduct tax at the correct rate under the Construction Industry Scheme).

There are only a few situations where you would be required to provide your UTR number; before doing so, you should give it some serious thought. The loss of control over your UTR raises the risk of becoming a victim of identity theft or fraudulent activity.

Factors to consider while making an invoice

There is little doubt that you have already been sending out bills for some time now, but hey, a quick review of best practice never hurts anybody, so why not give it a shot? Therefore, let’s make the most of this occasion to go through the necessary details that must be included in each invoice.

Things that must always be included on invoices:

  • The name(s) of your organization(s)
  • Legal contact info, including a physical location and phone
  • The organization or person you send an invoice to and their mailing address.
  • Invoice Date As of
  • Individually numbered invoices
  • The customer’s purchase order or work order number(s) a detailed explanation of the services rendered and their associated fees (the work that has been carried out)
  • Costs and a detailed itemization of purchases (e.g., days and day rate)
  • Amount due and instructions for depositing the funds
  • Terms of payment typically take 30 days unless otherwise agreed with the customer.

Can you trade without UTR?

You may not need need a unique tax reference number,  those who complete self assessments on an annual basis will need a unique tax reference number which is sent once you are registered as self employed

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Apply/Register For UTR Number Online Self-Employed 2022/2023

Who needs to apply for a UTR Number?

Everybody with an income is required to register for a UK UTR number to enable HMRC to identify your identity alongside details concerning your income and tax returns. It further shows whether you should start paying taxes. The UTR number relates to the National Insurance number that shows the government your contributions and entitlements to stuff like the state pension.

As a full-time employee, the employer handles all taxes on your behalf. Thus you do not need to go through the UTR application process. You can have a look at your tax deductions on the pay slip. All taxes are reduced from your salary through the company.

Nevertheless, if you have another source of untaxed earnings, which are acquired from side hustles or self-employment, you should register with HMRC to disclose the extra earnings. Failure to report to HMRC about extra earnings can lead to penalties and interests. Afterward, the tax you owe for the years you have been making extra earnings will be calculated, and you will be expected to pay within a given period.

Students are also required to get the UTR number since every employed person is subjected to the rule of tax payments, regardless of age or being in school. The National Insurance is subjected to anyone over 16 years.

Do you need to register for self assessment, Complete the form below to determine if you need to file a self-assessment tax return.

Self assessment
Were you self-employed as a ‘sole trader’ and earned more than £1,000 (before taking off anything you can claim tax relief on) ?
Were you a partner in a business partnership ?
Did you receive any income from savings, investments and £10,000 dividends ?
Did you have a total taxable income of more than £100,000 ?
Did you receive any foreign income ?
Did you receive any tips and commission ?
Did you have to pay the High Income Child Benefit Charge ? (Did you earn an income over £50,000)
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How Long Does Registration Take?

HMRC takes a week to a month to approve your UTR application and gives you a tax number. The period between which you get the UTR number depends on how busy HMRC is when you apply.

What happens once you are registered with HMRC?

After registering with HMRC, you are then registered for Self-Assessment, and you are required to fill in tax once per year by 31 January and work on your taxes. You are supposed to keep your earnings and expenses, commonly known as bookkeeping and tax records. The records will indicate what you have declared to HMRC concerning your tax returns. Apart from declaring your income on your tax return, you must pay all the taxes you owe by 31 January or 31 July annually.

How to get a temporary UTR number

In UTR applications, temporary UTR numbers do not exist, unlike in pay slips, where you can acquire an emergency tax code. The online application process means that the period it takes to get a temporary UTR number is similar to the waiting time for a permanent UTR number, which brings up a lot of confusion for HMRC.

Is my UTR number the same for my limited company?

A company has its UTR number for serving the purpose of corporation tax. Therefore if you have a business or planning to start one or from a limited company, you are required to get a separate UTR number for the company apart from your UTR number. A limited company is treated as a single entity, and so are you. If you are a director in a Limited Company, you are responsible for registering self-assessment and getting their UTR number simultaneously.

Can you apply for a UTR number online?

To sign in online, you will require a Government Gateway user ID and password. If you need a user ID for a business tax account, you can create one online. Afterward, a letter with your Unique Taxpayer Reference (UTR) is sent to you within ten days of the application. The letter is sent within 21 days after application if you are abroad.

How do I get a first-time UTR?

How do you receive a UTR number? To get the UTR number as fast as possible, you can make an online application and register as self-employed. The services are offered on HMRC’s website. After completing the self-assessment application, or set-up a limited company, your UTR number is automatically issued.

Can I apply for a UTR number by phone?

How can I get my UTR number via phone? It is possible to apply and get your UTR number via phone. You are required to call HMRC directly at 0300 200 3310. During the phone call and registration process, HMRC will ask about your details to fill out the application form. A national insurance number is also required to help them validate your identity. Afterward, wait approximately seven days when HMRC will post your UTR number.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

ISBC Campaigns and Projects Income You Have Earned from Driving Custom

Letter Received from HMRC regarding under declared income

Is there an exception when it comes to paying taxes in the UK? Well, the answer is no. This means that everyone involved in either large or small businesses like private driver services should pay tax. In this case, all people registered with online driver services apps like Uber, bolt, and any other found in the UK are obliged to pay tax as they are under the ISBN.

This is a rule outlined by HMRC in a letter sent to over 4000 app drivers.

 

The purpose of the letter

Well, online private driver apps have been available for many years, and throughout these years, there needed to be a system or method to track these drivers paying taxes. Therefore, HMRC developed a plan to track drivers’ tax activities. If you have been in the Uber/Bolt business and haven’t spent any tax for long as you have been in the industry,

HMRC can quickly tell you this. If you have been dishonest about your earning patterns through the online drivers’ apps, HMRC can also tell this and calculate how much tax you owe. Note that the letter’s purpose is not to threaten or scare the app drivers but rather to remind them of their duties of paying taxes.

 

When was the letter launched?

The first claim was broadcasted live on 4th April 2022. Hence, it is a new project that the HMRC is working on to ensure all drivers or small business owners comply with tax payment rules.

 

How does it work?

This is like a tracking system that detects how many private drivers are registered in the UK. They usually track through the driver’s license. The system can identify if the driver is under the taxi brackets, registered under the online apps, or even both.

This is accessible once the driver applies for a driving license or even renews it.

 

Where is the ISBC rule on private drivers applied?

Considering it is a new system that allows drivers to pay tax, it has yet to be imposed in many states in the UK. It is still a new check established in April 2022, but the target is to reach other regions like Scotland and Northern Ireland by 2023.

 

What is in the letter?

This letter is easy to understand and direct to the point for all drivers. It was set to be launched and issued by September 2022. It states that; the HMRC has information that shows these private drivers have been earning money transporting people from a particular time to date and the online drivers’ app(s) the drivers are registered with.

If the driver still needs to provide information about their earnings and tax payment for the period they have been in the business, the letter also outlines these details. It also states that HMRC knows whether the driver has been keeping earnings information anonymous.

 

Call for action.

 

What are drivers expected to do?

This letter comes with a 30 days call for action to every driver who receives it. The letter requires the drivers to fill in a tax position document enclosed with the letter and send it back to HMRC within the stated time. The document is meant to update their tax payment information from when they started their online and private driver services.

Find out more

 

How to update details about your work?

It is easier, and HMRC has created a platform where the drivers can provide the necessary information hustle free.

For those who may need to give information about their earnings (which helps to gauge the driver’s tax bracket), the enclosed document has a part that allows you to choose this option by ticking. Then visit the Digital Disclosure Service on GOV.UK to fill in your details.

 

About the procedure

  • Just go to GOV.UK and login to the site using the Government Gateway user ID and password. Register for one if you still need it.
  • On the page, click on voluntary disclosure, and you will receive an email that gives you time to calculate and pay the taxes you owe.
  • Note that the payment is done through the Digital Disclosure Service.

For people who may need a stable income or any income, provide this information on the documents. Tick the boxes that highlight your circumstances.

 

Other details on the letter document

There is an assistance option for people who may find it hard to navigate through the registration process.

People who have health and personal issues should contact HMRC offices directly.

 

Why does HMRC send letters?

The purpose of the letters is to remind the drivers about the payments and benefits of paying their taxes.

 

How does one receive a letter of confirmation from HMRC?

Once a driver confirms their payment status, the letter is sent via email within 15 working days of providing the needed information.

 

Does Uber work under HMRC?

Uber drivers also register under HMRC to provide their earnings information in the current tax year. This works as of 5th October 2022. Once you do that, you will receive a Unique Taxpayer Reference (UTR) number.

 

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Corporation Tax Return Deadline (Due Date) Extension 2022/2023

What will corporation tax be in 2023?

A corporation’s profits are subject to a profit tax. A company must pay taxes on its tax liability, which is its revenue minus its cost of items sold, general and administrative expenses, selling and marketing expenses, research and development expenses, depreciation, and other operating expenses.

Corporate tax rates in states vary a lot, and some states with low rates are known as “tax havens.” The effective corporation tax rate, or the rate a firm pays, is often lower than the statutory rate, which is the amount declared before any deductions because corporate taxes can be reduced by several deductions, government subsidies, and tax loopholes.

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What are the tax deadlines for my company?

This is a summary of the filing and payment dates for corporate tax, self-assessment, payroll, and VAT year 2022. There are numerous deadlines to remember while filing tax returns and making payments. The return or payment is due on the due date, regardless of whether it falls on a weekend or holiday.

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Corporation tax and Companies House

The corporation tax rate for limited liability firms is 19% of taxable profits.

The accounting period utilized by a company impacts the due dates for tax returns and financial statements. The accounting period refers to the period that the financial statements cover. When you launch a business, it typically lasts 12 months, but it could last up to 18 months.

Twelve months is the longest time covered by a corporation’s tax return. More extended periods necessitate filing two tax returns for the same accounting period.

Here are the key milestones:

  • The accounts must be presented to Companies House nine months after the completion of the accounting period.
  • The corporate tax payment deadline is nine months and one day after the completion of the accounting period.
  • The deadline for a corporation’s tax return is one year after the close of its accounting period.

The corporation tax must be paid before the return is due; however, you should prepare the return to be aware of the amount required.

Companies must submit their annual reports to Companies House by nine months after the end of their fiscal year. Companies House and HMRC will advise you of the several filing deadlines within the first year.

Most people opt for simplicity by utilizing the same year end for statutory accounts and company tax.

Corporation tax filing and payment deadlines

Accounting year end date: 31/12/2021

Accounts to Companies House: 30/09/2022

Corporation Tax: 01/10/2022

Tax return due: 31/12/2022

What is the deadline for UK corporate tax return?

Within a year after the accounting period it covers conclusion, your tax return must be filed. If you didn’t meet the filing deadline, you would be required to pay a late filing charge. Your Corporation Tax bill must be paid by a particular deadline. Typically, it occurs nine months and one day after the end of a fiscal quarter.

What is the deadline for CT600?

Companies are required to file their tax returns with the HMRC, and the deadline for doing so is one year following the close of the accounting period that the return covers.

How many months after year end is Corporation Tax due?

In most cases, the payment of corporation tax is due nine months following the close of your corporation’s accounting period, when corporation tax returns are required to be filed.

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Capital Gains Tax Property Sale UK, Germany and India

Calculating Capital Gains Tax on a Sale of a Foreign Property

 

When an asset is sold or otherwise likely in the United Kingdom, a UK Capital Gains Tax tax must be paid on the monetary gain, sometimes known as profit. Payment is determined by deducting the selling price from the initial investment.

When selling a home, for instance, the sale price or, in certain situations, the market value at which the property may reasonably be anticipated to barter in an open market will often constitute the sale value.

In cases when the property is transferred to an associated party, such as via a gift, a sale below market value, or a bequest, the market value is used instead of the fair market value, such as a family member. Assets purchased before March 31, 1982, will be valued at their fair market value on that date.

Expenses incurred to upgrade the property while you own it may also be deductible. Legal and professional fees and the cost of general improvements but not specific repairs or upkeep may be included.

After deducting any tax credits or exemptions from the total gain, the Capital Gains Tax may be calculated using the rate in effect at the time. If you are a non-domiciled foreign national or annex-part, not a citizen of the UK residing in the UK, you should read our guide to the tax regulations for NDMFNs and ex-pats.

An explanation of the 5-year rule for Capital Gains Tax in the United Kingdom, applicable to both residents and non-residents. If you leave the UK for an entire tax year and subsequently sell any lucrative assets, although separate rules have always applied for the property, you will no longer have to pay Capital Gains Tax on those profits.

However, more than one year is required, and a person must be a non-resident for at least five full UK tax years before they may take benefit from this regulation. Due to the potentially massive impact that time might have on your tax bill, it is abundantly evident that careful preparation is crucial in these circumstances.

For capital gains tax reasons, you are considered a temporary non-resident for up to five years, even if you are a non-resident for income tax purposes. If you come back to the UK within five years, you’ll have to pay taxes on some of your earnings from that period in the year you go back.

However, if you bought the asset, not real estate after you left the UK, any gain realized is not liable to UK Capital Gains Tax if you are a non-UK resident. With double taxation treaties in mind, your capital gains are free from tax in the UK but subject to tax in the nation where you live.

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Assets liable for UK Capital Gain Tax

All property savings for exempt types, some gifts, the sale of inherited property, the transfer of shares and assets upon divorce or the dissolution of a civil partnership, and the sale of certain other types of property are subject to Capital Gains Tax.

 

UK Capital Gains Tax rates

The top Capital Gains Tax rate in the United Kingdom applies to residential property where total taxable gains and income are more than the basic rate band for income tax.

The rate drops to 18% below that threshold. The rate for executors and trustees of estates is 28%. Individuals pay 10% on non-primary residences and 20% on all other assets.

If your company is not publicly traded, you can take advantage of a similar program called Entrepreneurs’ Relief, which reduces the capital gains tax you owe from 20% to 10%. Nonetheless, there has been a recent adjustment, so we will not discuss it here.

 

Capital Gains Tax relief

Several different types of tax reliefs may lower the taxable gain, including the following:

  • CGT on the gain from the disposal of a business asset can be postponed if the support is replaced with another business asset within four years, beginning one year before the removal and ending three years after the disposal through the rollover/holdover relief on replacement of business assets.
  • The formation of a firm may provide tax benefits, such as the release of personal liability in return for shares.
  • If some donations of company assets or gifts are put into trusts, the recipient or the trustee is not liable for tax on the estate until the asset is sold or otherwise disposed of.
  • For sales made after April 5, 2008, business owners are eligible for a tax break. It reduces the CGT rate to 10% if you sell off a significant portion of your firm or the whole thing. Beginning on April 6, 2020, there will be a one million lifetime cap which has only recently been reduced from 10 million.

 

Absorption of Capital losses

Any capital losses from a deductible transaction must be subtracted from any capital gains for the same year to calculate taxable income. These deductions come into play before the yearly exemption.

Any capital losses that aren’t used immediately may be used for future capital profits. Capital losses may only be deducted if they are reported to the IRS no later than five years and ten months after the end of the tax year in which they were incurred.

 

Can you avoid Capital gain tax on the sale of foreign property in the UK?

If you are a UK resident and ‘dispose of’ a foreign asset, you will be subject to Capital Gains Tax. If you have a permanent residence outside of the United Kingdom, you may be subject to different regulations than British citizens. Gains may also be subject to taxation in the nation in which they were realized.

 

Do I need to pay tax on money transfers from India to the UK?

Whether or not you have to make a payment depends on whether or not you are considered a resident of the United Kingdom for tax purposes. Foreign income earned by a non-UK resident is not subject to taxation in the United Kingdom. There is a standard rate of taxation on overseas earnings for UK residents.

 

Do I pay UK Capital gains tax if I live abroad?

Away from home

Gains from the sale of UK real estate or property are subject to taxation even if the seller is not a UK tax resident. If you move back to the UK within five years of leaving, you won’t have to pay Capital Gains Tax on other UK assets, such as shares in UK firms.

 

Can I sell My UK property abroad?

When selling or otherwise disposing of a property in the United Kingdom, you may be subject to capital gains tax even though you are not a UK tax resident. Even if no tax is due on the conveyance, you must notify HMRC of the transaction within 60 days of the transfer of ownership.

 

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

 

Accounts overdue proposal to strike off from Companies House Register

Why Would a Company Be Struck Off?

What could be the reason for a company being removed from the Companies House Register against its will? In a procedure characterized as “compulsory strike-off,” a foreign entity, including Companies House, will petition or request for the firm to be withdrawn from the register, usually on grounds of non-compliance.

This might comprise:

  • Failure to submit your annual basis confirmation letter (Form CS01).
  • Failure or not submitting accounts on schedule.
  • Failure to notify Company House when your registered office address changes.

In order to quickly and cheaply shut down a business that has ceased operations, the directors may permit it to be forcefully struck off the registry.

Directors of companies that have experienced a slump or are on the verge of bankruptcy may neglect to file annual financial statements as a sign of the overall deterioration of the business.

That can result in the start of the forced layoff process. The directors cannot be eligible to receive severance packages or other benefits if they do nothing and allow the faltering company to be struck off the registry. Additionally, they can experience severe repercussions like director dismissal and problems with personal accountability.

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Companies House Compulsory Strike off Process

The Companies Registrar must notify the company via at least two written communications that its inability to submit its annual accounting reports and/or verification report would result in its elimination from the Companies House Register as the first stage in the mandatory strike-off procedure.

These notices might not reach the directors if the corporation’s registered address changes. Before a business may be declared off-line, Companies House would have to have “legitimate grounds” to conclude it is no longer in operation.

 

 

First Gazette Notice for Company Strike Off

In the event that Companies House does not hear back from its communications, it will then issue a first strike-off written notification in the Gazette, which is the recognized periodical of official information. It will state that the firm will be removed from the Companies House Register and no longer be considered legitimate after two months, and is referred to as the “First Gazette Notice for Company Strike Off.” As a result, the petition has a two-month opportunity for objection from the company’s board of directors, stockholders, and third-party creditors like subcontractors and HMRC. The firm will be struck off the register and cease to exist in the absence of complaints from a third party, the administrators, or the shareholders.

It is advantageous to exercise caution if you are a shareholder or corporate director of one or more controlled corporations. We advise signing up for the Gazette’s notification services so you won’t miss a strike-off order that is published against your company. You can buy yourself the opportunity you need to avoid having your business suspended if you move immediately.

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Timeframe

It is most likely going to take four months from the time you receive the initial letter from Companies House until the business is terminated. Directors only have two months to rescue their firm if they fail to respond to the initial cease and desist letters from Companies House before the first strike-off warning is printed in the Gazette. 2016 saw an acceleration of this procedure. Directors used to be granted three months to protest the strike after the strike-off notice was published. Directors must now submit their yearly statements and account declarations on time because of the shorter window to avoid being struck off. It is now critical that directors submit their financial statements and confirmation reports promptly due to the shorter window for avoiding a strike.

 

What are the Consequences of Compulsory Strike Off?

A company may be removed from the Companies House Register regardless of whether it is still operating if you ignore warnings from the organization. That could lead to negative outcomes, such as:

  • As a legal institution, the business will no longer exist.
  • The industry’s remaining holdings, including any cash, would become bona vacantia, or ownerless property, and the Crown would immediately acquire ownership.
  • The company won’t be able to get the money it needs to get out of this jam.
  • There will be a risk associated with upcoming contracts with clients and suppliers.
  • Directors will be subject to inquiries into their behavior, and the results of the investigations could result in a 15-year ban on their serving as corporate directors.
  • The directors and creditors will be operating the business alone without the benefit of limited liability, which may subject them to personal accountability for the obligations of the corporation if it persists in operation.

Can you strike off a company with overdue accounts?

Then that doesn’t add up to avoiding payment because “accounts are overdue for payment.”

There will always be a sizable number of companies with filing shortcomings, and those inadequacies may lead to the filing of strike-off actions against a business.

 

Can I strike off a company with an overdue confirmation statement?

Directors are subject to disqualifying decisions, which effectively bar them from serving as company officers for a specified period of time. The business may also be removed from the register. Directors may be personally penalized in criminal courts for failing to file verification declarations, which is a criminal violation.

 

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

When is my First HMRC CT600 (Company Tax Return) Due ?

What time is the first HMRC CT600 due?

A company’s incorporation date is the day it was registered with Companies House, which is when it becomes incorporated. You have a maximum of 18 months to extend your first year. But if you don’t choose to extend your first year, Companies House will set the expiration date to twelve months + days until the end of the anniversary unless you start your business on the first of the month.

Before the return is due, the company tax must be paid. However, you should complete the return, so you are aware of the amount that is owed.

Limited firms must file their annual reports with Companies House nine months following the conclusion of the financial period. The filing deadlines are varied in the first year, and Companies House and HMRC will notify you of this.

Most people decide to keep things simple by using the same year-end for statutory accounts and company tax.

For instance, if your company was founded on July 7, 2021, Companies House will change your termination date to July 31, 2022. After that, this will serve as your accounting-specified date and time (ARD).

 

Find out more

 

This brings up a reporting anomaly. HMRC requires a Corporation Tax return following the conclusion of the accounting period. However, since a CT600 can only be reported for a maximum of 12 months, you must submit two CT600s. However, Companies House just needs one set of condensed accounts that spans the entire (extended) period.

In the example mentioned above year, you would need to submit an (HMRC) IXBRL Company Accounts filing for July 7, 2020, to July 31, 2021, as well as a CT600 for July 7, 2020, to July 6, 2021, and a second CT600 for July 7, 2021, to July 31, 2021. With each CT600 filings, you must include the accounts that span the extended time.

 

What is the CT600 submission deadline?

The date by which to submit CT600 to HMRC

 

Companies have a year after the end of the accounting period they cover to send their tax returns to HMRC.

Is this the first year of corporation tax payment?

Corporation tax is levied in the first year of operation.

The maximum length of a corporation’s accounting period for tax purposes is twelve months.

Due to the existence of 2 corporation tax accounting periods, the business is required to file two company tax returns in its first year of operation.

 

When do I know when to pay Corporation Tax?

 

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When is business tax due?

 

• You must pay corporation tax before submitting your business tax return.

 

• If your accounting period finishes on March 31, your corporation tax deadline is January 1; otherwise, it is nine months & one day after the end of the accounting period for the prior fiscal year.

 

When is business tax due? The Guide to rates and payment deadlines

 

When is the UK corporation tax return deadline?

 

Your tax return must be submitted within 12 months just after the completion of the accounting period it covers. You must pay a late filing fee if you fail to meet the deadline. Your corporation tax bill has a specific due date. It usually happens 9 months and 1 day after the accounting quarter ends.

 

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.

Capital Gains tax Return Specialists (CGT) reporting 60 days Rule 2022/2023

How is capital gains calculated?

The government implemented reporting requirements for UK citizens selling residential property starting on or after April 6, 2020.

Beginning on this day, taxpayers must disclose any sales of residential property in the UK and pay any anticipated capital gains tax (CGT) obligations. Taxpayers were expected to file reports and make payments within 30 days of completion from April 6, 2020, to October 26, 2021. As stated in the Autumn Budget 2021, the time frame was extended to sixty days for completions on or after October 27, 2021.

The property disposal must also be disclosed on the self-assessment tax return for persons subject to self-assessment. The guidelines have no bearing on the reporting and taxes of sales of non-residential property or property situated outside the UK. The following should be read with the understanding that the disposal occurs on or after October 27, 2021.

 

Find out more

 

Who do the regulations apply to?

The 60-day CGT regulations apply to the following UK tax residents:

Individuals, Trustees, Personal Representatives, Partners in Limited Liability Partnerships, and Joint Property Owners are examples of these categories.

 

What if I am not a resident in the UK?

For the sale of both residential & non-residential property, there are identical regulations for non-UK citizens. These are not addressed in this briefing. Therefore you should, as necessary, seek expert counsel.

 

Which disposals are subject to the 60-day CGT regulations?

The regulations are applicable to home sales in the UK when the date of sale (date of exchange of contracts) occurs on or after October 27, 2021, and a CGT obligation results from the sale.

Only direct interests in residential property, such as those acquired via the sale or gift of a home, are subject to the 60-day regulations. Dispositions of indirect interests, such as stock in a business that owns residential real estate in the UK, are exempt.

Any property that is appropriate for use as a residence or that is being built or modified for such use falls within the concept of residential property. Only the residential portion of the gain and the related CGT are required to be declared in accordance with the 60-day requirements if there has been mixed usage throughout the ownership period.

Taxpayers may be required to file a 60-day return under the following circumstances:

• A home they have never lived in or have only partially occupied during their ownership tenure;

• Vacation residences; and

• Rental properties.

Where no tax is due on the disposal, there is no 60-day reporting obligation. Where this applies, for example:

• The transfer is between spouses or civil partners and is a “no gain, no loss” disposition;

• Exemptions, such as the yearly exemption or the Private Residence Relief, will completely cover any gain resulting from the disposition; or

• The sale of the property results in a loss or no gain.

When selling their primary or only residence, taxpayers shouldn’t be subject to the sixty-day rules if they have resided in the property for the entirety of their ownership.

Additionally, the disposal will not be subject to the 60-day reporting obligation if it falls under one of the following categories:

• The donation of a lease with commercial conditions to a stranger for no additional cost;

• Charitable donations;

• Sales of investments in pension plans;

or

• The sale of the property is subject to income tax.

 

When did the 60-day CGT reporting period begin?

October 27, 2021

Taxpayers were expected to file reports and make payments within 30 days of the completion date from April 6, 2020 – October 26, 2021. As stated in the Autumn Budget 2021, the time frame was extended to sixty days for completions on or after October 27, 2021. March 9, 2022

 

Does the foreign property have to comply with 60-day CGT reporting?

Only for the direct sale of residential properties in the UK when there has been a capital gain is the 60-day CGT return rule applicable.

 

Do I have 30 days to report CGT?

“Clients selling residential real estate in the UK who owe CGT obligations must file and pay the tax within 30 days after completion.

October 5, 2022

 

How did HMRC know that I sold my home?

HMRC can learn about property transactions through land registration data, advertisements, modifications to the way rental income is reported, reports for stamp duty and land tax (SDLT), returns for capital gains tax (CGT), bank transfers, and other sources.

 

How long must a property be held in order to avoid UK capital gains tax?

FYI: Fortunately, CGT DOES NOT apply to the sale of most homeowners’ homes. Only properties that aren’t your primary house, or your main home where you’ve resided for at least two years, are subject to CGT.

 

Gm professional accountants have offices located in London Canary wharf, London Wimbledon ,Ilford Essex and Birmingham.