This tax calendar is a summary of the major tax dates for 2015.  These dates will affect you if you are caught under self assessment.

30 December 2014

If you have a 2013-14 tax liability of less than £3,000 and you file your self-assessment tax return online by this date, the tax office can adjust your PAYE code (provided you are an employee) so that you can pay any tax due for 2013-14 over time through PAYE, rather than as a lump sum due by 31 January 2015.

31 January 2015

If you were sent a 2013-14 tax return, this is the filing deadline.  This is also the deadline for paying the balance of any tax that is due for 2013-14.

Some people may have to make payments on account.  Each payment will normally equal one half of the previous year's tax liability (after taking off tax deducted at source and tax credits on dividends).  The payments are due on 31 January in the tax year and 31 July following the tax year.

Any Capital Gains Tax due for 2013-14 would be part of, or form, the balancing payment due on this date.

If either the balancing payment for 2013-14 or first payment on account for 2014-15 is not made by this date, then interest will be charged. If you have not made the balancing payment for 2012-13 by this date, a third automatic 5% surcharge will be applied.

If you were sent a tax return for 2013-14, you will be charged a penalty of £100 if HMRC has not received your return by this date. The penalty increases over time – see here for details.

28 February 2015

If you have not made the balancing payment due for 2013-14 by this date, a first automatic 5% surcharge will be applied.  The 5% surcharge does not apply to late payment of the first payment on account for 2014-15.

5 April 2015

The last day of the 2014-15 tax year.

31 May 2015

By this date, your employer should have given you a Form P60 (pay and tax details from employment) to assist you with the completion of your tax return for the year ended 5 April 2015.

6 July 2015

If applicable, your employer must provide you with a copy of Form P11D showing details of the benefits in kind provided to you or expense payments reimbursed to you. Benefits in kind include, for example, the provision of a company car.

31 July 2015

If you need to make a second payment on account for the tax year ending on 5 April 2015, this is the date by which it should be made.

If you have still not made a balancing payment of tax for 2013-14 by this date, you will be charged a second automatic 5% surcharge. The second 5% surcharge does not apply to late payment of the first payment on account for 2014-15.

If you have been sent an Annual Declaration to renew your tax credits, you should provide the information no later than this date.

5 October 2015

You must tell HMRC of any income or capital gains you have received in the 2014-15 tax year, if you have not received a tax return. You have a legal obligation to do this. HMRC may, or may not, need to send you a tax return - some taxpayers will be able to pay the right amount of tax through an adjustment to their PAYE code.

31 October 2015

If you were sent a 2014-15 tax return, this is the deadline for sending back the completed paper tax return.  Paper tax returns must be filed by this date if you want HMRC to collect any unpaid tax (of under £3,000) for 2014-15 through PAYE.

For self assessment tax returns filed online, the filing deadline is 31 January 2016.

30 December 2015

For those with a tax liability of less than £3,000, if you file your self assessment tax return online by this date, the tax office will adjust your PAYE code (provided you are an employee) so that you can pay any tax due for 2014-15 over time through PAYE, rather than as a lump sum on 31 January 2016.

If you start working for yourself, you must register for Self Assessment with HM Revenue & Customs (HMRC) within the first three full months of self employment.  Otherwise you may be liable to a penalty of £100.

Once you become self-employed, the tax rules are quite different from those that may have applied when you were an employee.  Instead of tax and national insurance being deducted from your earnings under PAYE, you should be prepared to receive a bill at some time in the future.  This can be an unwelcome surprise if you haven't put enough money aside.

What profits do HMRC tax?

The starting point for the calculation of taxable profits is your profit and loss account.  In calculating taxable profits you are entitled to claim deductions from your business income in respect of any expenses incurred for the purposes of running your trade.  When you buy equipment or motor vehicles, you will be entitled to deduct a proportion of the cost each year you own them and use them in your business.  Claims for such capital expenditure are known as capital allowances.  There is currently a scheme called the Annual Investment Allowance that will enable 100% of the cost of certain assets to be deducted, subject to annual limits.

Tax is payable on the whole of the profits of a trade, and so payments for your own 'wages' (drawings) are not deductible.  However, if your spouse works in the business, the wages are an allowable deduction, provided they are actually paid and are a reasonable reward for what is done.

How does HMRC allocate profit to tax years?

The aim of the system is that over the lifetime of your business the profits will be taxed in full, once, and once only.  The general rule is that the tax for a particular tax year is based on the profits of the twelve months to your accounting date in that tax year.  For example, the tax for 2011/12 – also known as the 2012 tax year - could be based on accounts for a year ending on various dates ranging from 6 April 2011 to 5 April 2012.  There are various complications arising in the opening years, closing years and when the accounting date is changed.

What is due and when?

Tax returns

Tax returns covering income for the year ending 5 April 2012 have to be submitted to HMRC by 31 October 2012 if filed by paper return or 31 January 2013 if filed online.  The return will include a self assessment of your liability to income tax and capital gains tax.

There are automatic penalties for late filing of tax returns.

Payment of tax

Tax due for the 2012 tax year will be payable by 31 January 2013.  In addition, ‘payments on account’ of tax for the 2013 tax year may also be due on 31 January 2013 and 31 July 2013.  See here for an explanation of payments on account.  Interest and surcharges will be levied for late payment.

What about national insurance?

The self-employed are subject to a two-tier system of national insurance contributions.  Class 2 contributions are at a flat rate of £2.65 per week, payable either monthly by direct debit or half yearly.  Profits between £7,605 and £42,475 are subject to Class 4 contributions at a rate of 9%, and at 1% above that.  Class 4 contributions are payable at the same time as the instalments of income tax.

Save for your tax

It is essential that you make proper provision to ensure the availability of funds to pay income tax and Class 4 national insurance.  Interest on unpaid tax is chargeable by HMRC, and is not deductible from business profits.  However, help may be available if you cannot pay your tax bills.

How we can help

We are available to offer advice regarding the various facets of self assessment.

Information in this Factsheet is correct at the time of compilation but is subject to changes in legislation.  Information is of a general nature and you are advised to contact us to discuss your particular circumstances.

If you have a business, chances are you'll also have a self assessment tax bill due at the end of January.  The following is a quick summary of how to deal with it:

1. The Deadline

If you have a tax bill for the 2011 tax year, it is due by 31 January 2012.  Failure to pay by this date will result in interest and possibly surcharges (e.g. there is a 5% surcharge on any outstanding tax not paid by the end of February).

2. How to Pay

There are a number of ways to pay your tax bill, the most common ones being a cheque in the post, by cash at your bank, or by BACS.  See here for the full rundown.  NB HMRC now accept faster payments, which may give you a couple more days.

3. What if You Can't Pay?

HMRC have a system in place called the Business Payment Support Service, commonly known as 'Time to Pay', which allows business owners to arrange with HMRC to spread the payments of their taxes if their business is struggling.  However, as we reported last year, it appears that the regime is not as easy as it used to be.

4. Payments on Account

Many sole traders and partnerships also have Payments on Account to make, which are contributions towards the following year's tax bills.  Please see here for an explanation as to how Payments on Account work.

This particular area has caused confusion for many taxpayers over the years; hopefully, the following explanation will help to simplify it a bit!

Under self assessment, tax liabilities are based on tax years, which run to 5 April.  The tax liability on a tax year is due by the following 31 January:

Tax year:         5 April 2011

Tax due:           31 January 2012

If the tax bill is less than £1,000, it is due by 31 January, gets paid and that’s it, end of story.

However, in general terms, if it’s more than £1,000, then you need to make ‘payments on account’ (POA) towards the next year’s tax liability, based on the previous year’s liability.  The payments are 50% due at the end of January (still within the tax year to which it relates) and 50% at the end of July.  Using the dates above, the POA would be by 31 January 2012 and 31 July 2012.

An example:

Dave finishes his tax return for y/e 5.4.11 and has a tax liability of £1,500.  His tax payments are:

2011 tax liability             £1,500

2012 1^st POA                 £   750

Due 31 January 2012      £2,250

2012 2^nd POA               £    750

Due 31 July 2012          £    750

In respect of the 2012 tax year, if Dave’s liability increased to £2,000, he would have a balancing payment of £500 (due by 31 January 2013), as he’d already paid 2 x £750 = £1,500.  In addition to this, he would of course have POA for the 2013 tax year of 2 x £1,000 (50% of £2,000), due at the end of January 2013 and July 2013.

Hopefully, you can see that once you get into a pattern of payments on account, they start calming down, so that you have the same kind of liability in January and July.  However, when you first start making payments on account, they can be quite a shock to the system (and wallet)!