Selby Johnson
December 6, 2024

The ultimate guide to tax deadlines for London-based businesses

Running a business in London requires more than just a great product or service—you need to stay on top of financial responsibilities, particularly tax deadlines. Bookkeeping and accounting play a critical role in ensuring that your business remains compliant and financially healthy. Missing these deadlines can lead to penalties, interest charges, and unnecessary stress. This guide outlines all the key dates and tips to ensure your business remains compliant with UK tax regulations.

For personalized support in bookkeeping and accounting, consider consulting with experts, who specialize in assisting London-based businesses.

Understanding tax obligations for London businesses

As a business owner, you must meet specific tax obligations based on your business structure—whether you operate as a sole trader, partnership, or limited company. Key taxes include:

  • Corporation Tax: for limited companies, this is based on your profits.
  • VAT (Value Added Tax): applicable if your turnover exceeds the VAT threshold (£85,000 in 2023/24).
  • PAYE and NICs (Pay As You Earn and National Insurance Contributions): for employers managing employee salaries.
  • Self-Assessment Income Tax: for sole traders, partnerships, and company directors.

Accurate bookkeeping is essential for tracking your business’s financial health and ensuring compliance with tax regulations. Accountants use this data to prepare tax filings and provide insights into financial strategy.

If you’re unsure about your specific obligations, Raedan can provide tailored advice.

Key tax deadlines

Corporation tax

  • Payment Deadline: corporation Tax is due 9 months and 1 day after the end of your accounting period. For example, if your accounting year ends on 31 March 2024, the tax is due by 1 January 2025.
  • Filing Deadline: your Company Tax Return (CT600) must be filed within 12 months of your accounting period's end.

VAT

  • Quarterly VAT Returns: if you're VAT-registered, you need to submit returns and payments quarterly. Deadlines are typically one month and 7 days after the end of the VAT period (e.g., for the period ending 31 March, the deadline is 7 May).
  • Annual Accounting Scheme: deadlines vary; check with HMRC for specific dates.

PAYE and NICs

  • Monthly Payments: PAYE and NICs for employees must be paid by the 22nd of the following month (or the 19th if paying by post).
  • RTI Submissions: Real Time Information (RTI) must be submitted on or before the day employees are paid.

Self-assessment income tax

  • Paper Returns: 31 October (for the previous tax year).
  • Online Returns: 31 January (for the previous tax year).
  • Payment Deadline: 31 January for balancing payment and first payment on account; 31 July for the second payment on account.

Making Tax Digital (MTD) compliance

  • MTD requires digital record-keeping for VAT and Income Tax. Bookkeeping becomes even more important under MTD rules, as accurate records form the foundation of your digital tax submissions. If you’re navigating MTD requirements, visit raedan.co.uk for help transitioning to compliant systems.

Tips to stay on track

  1. Set calendar reminders: use digital tools like Google Calendar or accounting software to alert you of upcoming deadlines.
  2. Automate where possible: tools like Xero, QuickBooks, and Sage can streamline bookkeeping and tax filing processes.
  3. Hire a professional: an accountant can save you time and ensure accuracy in filing.
  4. Budget for taxes: set aside funds regularly to cover upcoming tax liabilities.
  5. Register for HMRC alerts: HMRC offers email reminders for key deadlines.

Partnering with a specialist in bookkeeping and accounting, like raedan.co.uk, can make managing these tasks much easier.

Penalties for missing deadlines

Missing tax deadlines can be costly. Penalties include:

  • Corporation Tax: up to £1,500 for late filing.
  • VAT: surcharges based on turnover and lateness.
  • Self-Assessment: initial £100 fine for late filing, increasing with further delays.
  • PAYE: 1%-4% of late payments, depending on frequency.

Accurate bookkeeping can prevent errors and ensure deadlines are met, while professional accounting services provide the expertise to avoid costly mistakes. Learn more at raedan.co.uk.

Upcoming changes to watch

  • VAT threshold reviews: the VAT threshold may change in future budgets.
  • Income Tax MTD rollout: MTD for Income Tax is set to expand, impacting more businesses.

Conclusion

Staying on top of tax deadlines is essential for London-based businesses to avoid financial and legal pitfalls. By combining effective bookkeeping with expert accounting advice, you can keep your business compliant and stress-free.

For complex situations, consult a tax advisor or accountant familiar with the UK tax system.