INDIVIDUALS

For paper based tax returns, the deadline is  31 October 2024. But if get a Chartered Accountant to complete your Self-Assessment tax return or do it online yourself, the deadline is 31 January 2025.

COMPANIES

Your tax return is due 12 months after your year end. However, do bear in mind that your corporation tax is due 9 months and one day after year year end, so do plan accordingly to get your tax return done before the payment date.

A Self-Assessment personal tax return informs HMRC about your taxable income and gains in a tax year. Tax is usually deducted automatically from wages, pensions, and savings. If this is the only income you have, you probably don’t need to do one. However, If you have other income, such as from self-employment or rental property, you may need to file a Self-Assessment tax return. 

If any of the following applies to you, then you will need to complete a Self Assessment tax return

• Self-employed and your income is over the £1,000 trading allowance
• Company director with an income that has not been taxed under PAYE (except director of a non-profit)
• Partner in a business partnership
• Landlord or you receive property income (unless <£1,000 or it qualifies for rent-a-room relief)
• Trustee or executor of an estate
• You want to claim tax relief of employment expenses of over £2,500 in a tax year
• Earned > £2,500 in untaxed income (eg. tips or commission)
• Earned income from savings and investments >£10,000 
• Earned foreign income (unless this is only dividends and your total dividends including UK dividends are less than the £500 dividend allowance)
• Non-resident with a taxable income in the UK (including overseas landlords getting UK rental income)
• Annual income is £100,000 or more
• Subject to High Income Child Benefit charge because you claim child benefit but your income or partner’s income is over £60,000
• Sold assets subject to capital gains tax (eg. property, shares, cryptocurrency)
• Religious minister of any kind
• Receive state pension over the personal allowance

 If you are still unsure if you have to complete a Self-Assessment tax return, you can use the HMRC Self-Assessment tool to confirm.

If you fall under Self-Assessment, mrtaxman can help you file your tax return and make sure you don’t pay more tax than needed.

You may need to pay capital gains tax if you sell an asset that has increased in value. This includes property (that is not your main home), shares, cryptocurrency and personal possessions worth £6,000 or more. We can help you calculate any potential tax liability and explore ways to minimise it.

The current rate of corporation tax is 19%, and is payable on taxable profits (sales less business expenses and adjustments).

Corporation tax has increased to 25% in 2023 in line with Budget announcements, for businesses with taxable profits above £250,000. Businesses between £50,000 – £249,999 will have a corporation tax rate between 19% and 25%.

Dividends are taxed at 8.75% (basic rate), 33.75% (higher rate), and 39.35% (additional rate).

A £500 tax-free dividend allowance applies from 6 April 2024 (this was £1,000 in 2023 & £2,000 in 2022).

Dividends are treated as the top band of income.

If you have dividend income (outside of an ISA) of less than the dividend allowance you pay no tax on your dividends, even if you are a higher or additional rate taxpayer. Your dividends are covered by the dividend allowance.

If your total income is less than the personal allowance, your income is covered by your personal allowance and your dividend allowance is effectively unused.

Self-employed individuals pay Income Tax and National Insurance on their profits through self-assessment. Limited companies pay Corporation Tax on their profits, and directors/shareholders may also pay Income Tax and National Insurance on salaries and dividends. 

Limited companies have more administrative responsibilities, including registering with Companies House, filing annual accounts, and adhering to strict record-keeping requirements. Running a limited company provides limited liability protection, potential tax efficiencies, and a more professional image. However, Self-employed individuals have fewer formalities, it is easier to set up, cheaper to run and has less paperwork. 

At Mrtaxman we are able give you advice on which is the best structure for your personal situation, and to ensure it is as tax efficient as possible.