Do you have personal tax due on January 31st?

Why should I submit a personal tax return:

As a Director of a UK Ltd Company you are legally obliged to file a personal tax return each year.

If your total personal income exceeds £42,475 for the tax year 2011/2012 (6th April 2011- 5th April 2012), your income is in the Higher Rate Tax bracket. This means you will have a personal tax liability to pay by January 31st.

This is separate and in addition to your company tax liabilities and you will be required to pay additional income tax to H. M. Revenue & Customs (HMRC), when you file your Personal Tax Return.

Personal income includes salary, dividends from your company, as well as any income outwith the company such as rental income, pension income, savings interest or any other income you may have.


Any additional personal tax liability which is due to be paid must be paid, by you personally, to HMRC by 31st January 2013. If you opt to pay the liability using funds held in your company you should decide whether you wish for this transaction to be classified in the accounts as either a dividend or a director loan.

Payment on account:

Please note, HMRC require that you make a “payment on account” if your tax bill is greater than £1,000 after PAYE (pay as you earn) and other deductions at source. You are required to make 2 payments on account within the year. The first is paid in January 2013 and the second in July 2013.

A payment on account equals one half of the previous year’s tax liability. At the end of the following year, your actual personal additional tax liability is calculated and a balancing payment of the difference between what you are due to pay, and what have paid may be required.

How to make payment:

Payment can be made by cheque, bank transfer or online:

  • Click, Pay now
  • Click pay under Self Assessment
  • Enter your Unique Tax Reference (xxxxx xxxxx), the amount to be paid and the remainder of your payment details

Failure to submit a return:

For the 2012 tax year (year to 5 April 2012), the tax return is due 31st January 2013 and the late filing penalty regime is as follows:

  • If filed 1 day late, charge of £100, even if there is no tax to pay or if already paid.
  • If filed 3 months late, charge of an automatic daily penalty of £10 per day, up to a maximum of £900.
  • If filed 6 months late, charged further penalties, which are the greater of 5% of tax due or £300.
  • If filed 12 months late, charged further penalties, which are the greater of 5% of tax due or £300.
  • In serious cases, you may be asked to pay up to 100% of the tax due instead.

Failure to pay your personal tax liability on time:

You must pay any personal tax you owe to HMRC by 31st January 2013, if you don’t pay your tax on time, you will have to pay interest on anything you owe and haven’t paid (late payment interest of 3% of sum owed), including any unpaid penalties, until HMRC receives your payment. HMRC penalties for paying late are:

  • If paid 30 days late, 5% of the tax you owe at that date
  • If paid 6 months late, a further 5% of the tax you owe at that date (in addition to the previous 5%).
  • If paid 12 months late, a further 5% of the tax you owe at that date (this is as well as the two 5% penalties above).

We hope this has helped you understand your Personal Tax responsibility as a Company Director a little better, but remember as a QAccounting client if you have queries on this, or any subject, please contact your dedicated Account Manager who will be happy to help.

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