Income Tax – Self Assessment

There are five main types of tax that are relevant to businesses: income tax, corporation tax, National Insurance, VAT (value added tax) and capital gains tax. Certain forms must be submitted to HM Revenue & Customs (HMRC) and payments must be made by certain dates to avoid incurring penalties for late submissions and interest on late payment of any tax due. HMRC’s tax year runs from 6 April to 5 April the following year.

This key tax dates in 2019 as they apply to the different tax liabilities of a business. It also provides information about the penalties for non-compliance with the deadlines. Taxation is a complicated area and professional advice should be sought to ensure that all tax obligations are met.

Income Tax – Self Assessment

Anyone who is self-employed or in a partnership is required to complete a self-assessment tax return each year to determine how much income tax and National Insurance they must pay.

Self-assessment tax returns must also be completed by company directors and individuals with complicated tax affairs, to enable HMRC to assess whether any additional tax is owed.

Anyone with an income tax liability of more than £1,000 may be required to pay half of that liability ‘on account’ for the following year’s tax by 31 January, and a second payment on account by 31 July.

31 January 2019

  • This is the deadline for submitting an online tax return to HMRC for the tax year that ended on 5 April 2018. The tax return must reach HMRC by midnight on this date to avoid incurring any penalties.
  • Anyone who has not submitted their completed tax return by this date will be charged an automatic penalty of £100. This penalty applies even if they have no tax to pay. For a partnership tax return, there is a £100 penalty for each partner.
  • The balancing income tax payment for the year ended 5 April 2018 must be paid by this date.
  • In addition, the first payment on account for the current tax year should be sent to HMRC by this date. This should correspond with the expected final liability for the year ending 5 April 2019. If the tax liability is likely to be significantly less than expected, HMRC should be notified and a claim should be made to reduce the payment due.
  • This is the deadline for amending a 2016/17 tax return for claims relating to previous tax years.

28 February 2019

An automatic 5% penalty will be charged by HMRC if the balancing payment has not been made by this date.

6 April 2019

This is the first day of the new tax year (2019/20). HMRC sends 2018/19 self-assessment tax return (SA100) forms or Notices to Complete a Tax Return (SA316) before the end of May.

30 April 2019

Returns for the tax year that ended on 5 April 2018 submitted after this date will incur an additional penalty of £10 per day up to a maximum of 90 days (£900).

31 July 2019

  • Anyone who has still not sent HMRC a self-assessment tax return that was due on 31 January 2019 will be charged a further penalty of £300 or 5% of the tax due, whichever is the highest.
  • A second automatic 5% penalty will be charged if someone failed to provide the balancing payment in the first tax instalment that was due on 31 January 2019.
  • The second payment on account of tax liability for the year 2018/19 is due by this date. Check that it corresponds with the expected final liability for the year ending 5 April 2019.

5 October 2019

If HMRC has not sent a SA100 tax return by this date, HMRC must be notified about any income received that has not been taxed, or any capital gains tax liabilities in the year ending 5 April 2019. HMRC will then send a tax self-assessment form if it considers it necessary, or needs further details.

31 October 2019

Paper-based self-assessment returns for 2018/19 must be submitted by this date. If they are not, an online return must be submitted by 31 January 2020 to avoid an automatic penalty of £100.

Submitting a paper return enables HMRC to calculate any tax that is payable. It also means that HMRC can collect any outstanding amounts of less than £3,000 via Pay As You Earn (PAYE) tax codes in order to spread the payments over a year. HMRC will not normally do this if the unpaid tax is more than 50% of someone’s normal tax liability. If preferred, individuals can choose to pay the tax in one lump sum.

30 December 2019

If a 2018/19 self-assessment tax return is not submitted by the deadline for paper returns, unpaid tax under £3,000 can still be collected via PAYE tax codes if an online return is submitted by 30 December 2019.