It’s fast approached like every year and now tax season is just around the corner…literally!
Its important to keep your records up to date all year and even more so when Self-Assessment submission date is only a few weeks away, keeping on track of your finances throughout the year not only allows you clarity on how much you’ll need to pay but is a necessary measure if your likely to struggle to pay your tax bill in one go (minus what you’ve paid periodically on account of course)
Company directors will need to send any income received throughout the tax year that hasn’t gone through their PAYE scheme to their accountant asap to ensure it is counted and calculated correctly. Other sources of income include:
- Self-Employed Income
- Land or Property Rental Income
Don’t forget when sending this information over, the earlier the better your accountant will have 100’s of other self-assessments to check and submit as well as yours so they’ll be grateful to receive it early.
COVID-19 VAT Deferral Payment Scheme
The government introduced this scheme at the beginning of the year enabling businesses to defer VAT payments between 20th March and 30th June 2020, did you use this scheme? Are you going to struggle to pay the payments deferred by the 30th March 2021?
If you like many other businesses know you are going to be unable to make the payment by March 31st there are options available for you, there’s the option to spread the payment over smaller, interest free payments for 2-11 equal monthly payments up until March 2022. To be eligible for this scheme you must have:
- Deferred VAT payments outstanding
- Be up to date with your VAT returns
- Pay by direct debit
- Pay your first monthly installment but the end of March 2021
- Opt in options for the scheme will be available early 2021 but you must opt in before 31st March 2021
If your company’s year end date is 30th April you will need to send up to date corporate accounts that can be worked on and submitted by the end of January 2021, this give plenty of time to gather anything that could be missing well in advance of your final submission date. It’ll also mean you’ll have as mentioned above with Self-Assessment clarity on what will be due and allows you time to put in any preventative measures should there be a shortfall of funds.
If your year end is October or before you can still send in your accounts, it enables the work to be complete and you to put the amounts into your cash flow practices. Our own cash flow spreadsheet is available to download at www.turpinaccounting.co.uk/cashflow if you do not already have one. Cash flow forecasting is a necessary and great tool for every business, you can see tips on how to use it on the link above.
Don’t forget, grants from your local council due to the pandemic are counted by HMRC as taxable income so when it comes to filing for any period ending after March 2020 your next tax bill may actually be higher than you were expecting due to this additional income you’ve received. Your company year end date will effect as and when you will need to pay this. Remember Corporation Tax Is due 9 months and 1 day after your company year-end
As you will of seen across the news platforms the Job Retention Scheme has now been updated to continue until April 2021 all furlough you have claimed must be offset against staff costs, this should ensure there isn’t a large tax bill arising from these grants.
Remember, submitting information for all CJRS grants must be done so in the 2 week time period after the payroll period has ended.