Our small business tax return service is designed to help the busiest of owners, but how does it work?
When you start a business, filing a tax return is easy to put off until it’s too late, especially when you’ve got a long list of tasks to complete. That’s where hiring an accountant makes sense.
In today’s post, we’ll go through everything you need to know to hit your business tax deadlines and save on stress.
What’s a business tax return?
A small business tax return reports spending, losses, profits, and corporation tax to HMRC.It normally involves completing a CT600 form and submitting a financial report with calculations that show how much tax you owe.
Depending on your business type, you’ll need to prepare your tax return differently:
As a limited company
- you must pay your corporation tax on your business’s taxable profits. HMRC needs full accounts for corporation tax.
- you must prepare annual accounts to file with Companies House. When these are due depends on when you set up your limited company.
- shareholders need to pay dividend tax on dividends.
As a sole trader or partnership
- you don’t need to prepare accounts for tax purposes, but we’d advise following similar protocols to keep on top of your expenses and profits.
- if you trade through a limited liability partnership, you must prepare accounts for filing with Companies House.
- you don’t need to submit accounts to HMRC unless you’re subject to an investigation.
Our service will help you file your tax return online, so let’s go through the common steps and questions we’d ask you to get you on the right track.
Get registered with HMRC
To submit your tax return online, you must first register with HMRC.
Once registered, you’ll get an activation PIN in the post. It can take a week or so for this to arrive, so make sure you leave plenty of time.
Organise your expenses
Half the battle of filing your tax return is organising your expenses. If not done correctly, you could find yourself frantically searching for receipts, invoices and other payment records at the last minute.
But do the work early on, and you’ll dodge all this stress. So, make sure to keep regular records of all your expenses — including travel and entertainment costs. All that’s needed is a bit of due diligence each month.
Keep track of your UTR
Alongside your PIN, you must quote your Unique Tax Reference (UTR) on your tax return.
Ten numbers long, you’ll find it on all your paperwork from HMRC.
Depending on where you work, there are different benefits available to you that you can claim as part of your tax return. As part of our service, we’ll go through these benefits to see what else can be done to maximise savings.
When you work from home
If you work from home, there are other things you can claim as part of your costs for things like:
- council tax
- mortgage interest or rent
- internet and phone usage.
You can calculate your costs based on how much time you spend working from home or how many rooms you use for business.
Make sure to look at gov.uk for guidance on how to do this. There are different rules depending on whether you own a limited company, are self-employed, or are a partner.
You can also claim for other items, such as:
- business-specific insurance
- accountancy fees
- professional services
- office equipment and stationary.
Different rules apply depending on how your business is set up and what type of accounting system you use. Make sure you seek advice from an expert like us.
When’s the deadline?
Your corporation tax bill is due 12 months from the end of your company’s accounting date. But since corporation tax must be paid nine months and one day after the end of your company’s accounting date, it’s best to file your company tax return early to find out how much corporation tax you’ll owe.
Self-assessment tax returns (if you’re a sole trader) must be submitted by midnight on 31 January. If you miss the deadline, HMRC could fine you £100, and you’ll have to pay the tax you owe plus interest.
Of course, if you have a genuine reason for paying late — like an accident, illness or robbery — call HMRC and talk to them about it.
Talk to a pro like to us
Hopefully, that’s made things a bit clearer. But like everything in life and business, getting your head around expenses, profits and corporation tax can be hard when you’re already running on empty.
That’s where we can help. Everything in our article today is in our tax return service for small business owners, all designed to help you get your return filed online, tailored to your firm and with a few more informal chats along the road.
Get in touch with us today — we’ll help you maximise your tax savings through our small business tax return service.