As we fast approach the January 31st Self Assessment Tax deadline, here’s a reminder of what you need to do with regards to your tax obligations.
Do I need to submit a self assessment tax return?
Yes, as a Director of a UK Ltd Company you are legally obliged to file a self assessment tax return each year. Your tax return and any tax due must be submitted and paid electronically by 31st January 2017.
If your total personal income takes you into the higher rate tax bracket (this means your income exceeds £42,385 for the tax year 2015/2016 (6th April 2015- 5th April 2016) you will have a personal tax liability to pay by January 31st 2017. This is separate and in addition to your company tax liabilities.
Personal income includes salary and dividends from your Ltd Company as well as any income outside the company such as rental income, pension Income, savings interest or any other income you may have.
When is my personal tax liability payment due?
Any self assessment tax liability must be paid by you personally, to HMRC by 31st January 2017. If you opt to pay the liability using funds held in your company, you should advise your Client Manager whether you wish for this transaction to be classified in the accounts as either a dividend or directors loan.
What are payments on account?
If your self assessment tax liability is greater than £1,000, HMRC require you to make “payments on account”. You are required to make 2 payments on account within the current year.
These payments on account equate to one half of your 2015/2016 self assessment tax liability, and are paid in January and again in July.
The payments made go towards your following year’s tax liability. Please note, if what has been paid leaves an amount against what is due, a balancing payment will be required. If you require any further information on how to make the payment, please contact your Client Manager.
What Legal Issues Might Contractors Face?
From tax investigations to client disputes and defamation
Does Length Of Contract Impact Your IR35 Status?
Should contractors be wary about working for a client over a long period of time?
What Do Our Contractor Accountancy Packages Include?
All your accountancy needs and more, for one fixed fee.