UK Tax Payments (Part 2)
Limited Company
(For Sole Traders/ Partnerships see part 1)
If you are a Director of a limited company then you will make personal tax payments on or before the 31st January every year if you are due tax from dividends or any other income. You can file your tax return online any time from 6th April to 31st January and the tax that is calculated on this will be due for payment on the last day of filing (31st January). I would always advise that you file your tax return as soon as possible after April and then make a note in your diary to pay in January. See part 1 for more information on individual tax return deadlines.
The tax due on your salary will be collected through the company’s payroll system and forwarded on to HMRC. You need to enter your total salary and tax paid in your tax return but if you had no other income, no benefits in kind and you are on the average tax code then there will be nothing for you to pay.
The company’s corporation tax will be due 9 months and 1 day from the date of your year end. For example if your year end is 31st March 2015, your corporation tax is due by 1st January 2016.
If however,you extend your year end or you have first started trading and your first year is over 12 months you will have two dates for corporation tax payments. Effectively the date for payment for corporation tax is never more 12months + 9 months and 1 day from the 1st day of trading for that year, and if your financial year is more than 12 months that you will have two payments to make fairly close to each other. For example, if your start date was 3rd March 2014 but your end is 31st March 2015 then you will have to make one payment by 3rd December 2015 and then another payment by 1st January 2016. This is all calculated through your corporation tax return but it is just to explain why you would receive two requests for payments.
If you have concerns about cashflow or budgeting please contact me to find out how I can help you. Additionally please keep an eye out for my ebook 15 steps to improve your cashflow coming soon!
© Helen Monaghan
