I have started a new business - when is my tax due?

With any new business, having dealt with the formalities of registering with HM revenue and Customs, the question as to when tax is due will undoubtedly arise.

Let us say a sole trader starts up in business from the first of this month and decides to go with a year end to match that of the tax year, i.e. 5 April 2011.

The first tax return for the new business will be issued in April 2011 and tax on the profits from 1 September 2010 to 5 April 2011 will be due on 31 January 2012, plus the individual will have to make a payment on account towards the eventual 2011/12 tax and class 4 national insurance liability on 31 January 2012 and 31 July 2012 (each payment is equal to half of the tax and class 4 national insurance liability for the previous year) unless:

  • the previous year's tax and class 4 national insurance bill was below £1,500, or;
  • more than 80% of the tax due was collected at source.

Let us say the tax and class 4 national insurance liability for the period 1 September 2010 to 5 April 2011 was £10,000 then the total due on 31 January 2012 is £15,000 with a further payment due of £5,000 on 31 July 2012.

For small companies the Corporation tax liability is usually due nine months after the year end.

The above is for general guidance only.  Buick & Co Chartered Tax Advisers take no responsibility for this blog and its reliability.  If any tax planning is to be undertaken specific advice should be sought beforehand from a professional tax advisor.

Print   Email