There are details you need to know to get a better understanding about factors relevant to your tax payments. If you are doing your personal tax returns, you have to be familiar how self-assessment works while keeping track of the deadline for filing. If you have a business or people under your employ, then the PAYE and payroll processes are the ones to keep in mind. Take note though that if you hit a snag, it is best to make a quick call to the HMRC helpline.
The 31st of January is the deadline for submitting a self-assessment tax return. It is done yearly. If you file the form online, you are allowed typically up to 20 working days additional time. However, this will be allowed only if you haven’t submitted a tax return the year before.
Penalty charges for late payments apply. This is the reason why filing your self-assessment tax return on time is not only encouraged but should be a must. The late penalty charges are automatically charged against your account. You get a £100 penalty if your tax return was filed up to 3 months late.
The fine quickly increases as the payment gets late over time. If you anticipate difficulty in submitting your tax return or you think you will be late in filing, it is advised to let them know ahead of the deadline.
Doing the HMRC Self-Assessment will depend on your current employment situation. Self-Assessment is a system used by HMRC in collecting taxes from people or businesses. Everyone who earns in the United Kingdom is required to report their income. Tax is automatically deducted from wages, pensions and savings for the majority of the British people. They do not need to worry about filing a self-assessment. If you are unsure if you need to file for yourself then dial the HMRC phone number to be sure. You don’t want a tax evasion case to be filed against you so it is better to be safe than sorry.
PAYE and Payroll
The PAYE and Payroll is a way for the Revenue agency to collect income tax and national insurance payments from employers. A PAYE system has to be incorporated if you are an employer. This will become part of your payroll system specifically if employees earn less than £112 per week. This also applies if they receive benefits and expenses. If they have another job then this system also kicks in for them.
In paying the employees, employers must ensure that the former has been deducted their tax and National Insurance before handing them their salaries. If employees earned over £155 per week, then the Payroll software can be used. It is very convenient because it will automatically work out the amount to deduct.
Bear in mind that when hiring employees or staff, you must be a registered employer using the HMRC process. This can be done online. It is important that prior to the new employee’s first paycheck you are duly registered in the Revenue office’s system. It will take weeks to register so you have to make sure there is enough time allowance to do so.