A small business owner may have three fronts to cover to keep HMRC happy.
Tax can be a minefield for the unwary. Here is a checklist to help you through. Where your knowledge and experience is not enough, don’t hesitate to get professional help.
1 Register for tax on start-up. You’ll be penalised if you haven’t done this within three months.
2 Decide when to register for VAT. Once your turnover reaches the current threshold, you have no option but to register. Before that, does your business need to look well established to penetrate the desired markets? Or will it help you get customers if you can keep prices down by not charging VAT? Looking at your start-up costs, how much VAT you could reclaim if you were registered? Consider all factors before deciding.
3 Get familiar with VAT rules. Always submit your quarterly returns and payments on time.
4 Depending on what kind of organisation you have set up, you may have to pay corporation tax. This payment will be due before the deadline for submitting your tax return. To be safe, complete the return and submit it early at the same time as the payment.
5 If you have employees, once they earn a certain amount, you have to deduct tax and National Insurance Contributions from their pay, and pass them on, together with any employers’ contributions due. Find out how to do this and make sure you pay on time, so you avoid interest charges.
6 Make the regular form returns on time, including the annual ones due by May 19th each year.
7 Issue P60s to relevant employees by 1 June each year.
8 Find out your responsibilities in regard to, sickness, maternity and other special benefits.
9 Check the tax aspects of company cars
10 Always file tax returns and pay on time to avoid penalties.
11 Plan for the payments by putting money away. A special account is a good idea.
12 Check your tax bill. Human error can creep in, even from HMRC.