If you are an employee of a company, your salary income will be taxed under the Pay As You Go (PAYE) scheme and you pay tax every month. It is your employer’s responsibility to deduct the correct amount of income tax and National insurance contribution from your pay. Your employer will also be responsible for preparing relevant forms such as P60, P45, P11D and P14 and submit to HMRC about your employment income.
Sole Proprietors (self employed) and partnerships
If you are in business as a sole trader, you will pay tax on your business profits for the accounting year ending in the tax year by three installments: first payment on 31 January and the next payment on 31 July and with the final payment on 31 January on the subsequent year.
You must file your self assessment return to HMRC before or on 31 January. Any tax overpaid for the accounting year will be refunded by HMRC.
Partner in a partnership will be assessed the same way as sole trader for income tax purposes.
The company is obliged to pay tax on its profits nine months after the accounting year end and submit their corporation tax return 12 months after the accounting year end to HMRC confirming the final amount of tax liability or refund. Your local tax office will assess the corporation tax return and issue confirmation on your company tax liability.
Interest penalty will be levied on unpaid tax.
Seek Professional Help
Concise Accountancy provides taxation services to individuals and businesses. Free feel to contact us if you require help to compute your tax liability and complete your tax return.
We also offer fixed fee accounting packages that include taking care of limited company taxation needs. Our business startup packages offer good value for money for people starting a business. We take care of your accounts and complete your corporation tax return for you.
Concise Accountancy providing taxation solutions for businesses and individuals.