There are two common issues for taxpayers with Notices of Cding that have been issued for 2010-11.

1. Many of the Notices are simply wrong. In some cases, reference is made to employers from several years ago, in others there is no reference to the state pension that is being received, and so on. This will ultimately mean that the wrong tax is deducted from the taxpayer. This will either be too much or too little. Either way this is not good and will need correcting.

2. The new regime for higher-earners comes in in 2010-11. This means that on earnings in excess of  £100,000    there is a withdrawal of the tax allowance at a rate of £1 for every £2 earned,  so that once earning more than £112,950 the entire standard tax allowance is gone. Beyond earnings of £150,000 the rate of tax is 50%!  This means that taxpayers who are expected to earn more than £112,950  are being sent Notices of Coding with a standard tax allowance of nil. The correction to this (if one is required) will only arise when the 2010-11 tax return is completed.

In either case, if you believe your tax coding is incorrect you should query it through us, or with HMRC, as it will affect the tax you pay during the year, as well as not necessarily leaving you with no further liability at the year end.

Company Annual Return

What is it?

The Annual Return (also known as the “form 363″) is an annual return to Companies House in which the company confirms the key addresses, directors and shareholders and their availability on the public record. It is NOT the annual accounts.

When is it due?

The annual return has a “made up to” date which is the anniversary of the company’s incorporation, and a “due date” which is 28 days after the “made up to”date.

Company Accounts

What is it?

The Accounts are an annual return to Companies House in which the company confirms the financial position of the company. The Accounts are available to the public as a matter of record.

When is it due?

The company will have an “Accounting Reference Date” which is normally the last day of the month in which it was incorporated. The Accounts are normally made up to each anniversary of the Accounting Reference Date, and are due at Companies House within 9 months of that date.

Corporation Tax

What is it?

Corporation Tax is payable on the profits that companies make. At the same time as the Accounts are produced, the Corporation  Tax due from the company is calculated, and a return made to HMRC with the figures. This is the CT600 Corporation Tax Return.

When is it due?

Corporation Tax Returns are due at HMRC within 12 months of the accounting period end. Payment of Corporation Tax is due with 9 months of the year end.

 An Example

 So, for example, a company incorporated on 15th April 2009, would have the the following key dates and deadlines:

Date of Incorporation:  15th April 2009

Accounting Reference Date: 30th April

1st Annual Return made up to:  15th April 2010, and due by 13th May 2010

Accounts made up to 30th April each year, and due at Companies House by 30th January each year.

Corporation Tax made up to 30th April each year, due by 30th April of following year with tax payable by 30th January following the year-end.

• 31 January after the end of the tax year if you want to work out your own tax bill
• 30 September if you ask HMRC to work out the tax
• 30 December if you file the return over the internet (29 December if using the Electronic Lodgement Service) and you want an underpayment (not exceeding £2,000) to be collected via the PAYE system.

The penalties for late returns are:

• £100 (automatic) - return up to 6 months late
• £200 (automatic) - return more than 6 months late
• 100% of tax due (max) - return more than 12 months late
• £60 per day (maximum) for continuing delay - if approved by the Commissioners for HMRC.

There is also a fine for late payment of tax called ’surcharge’. Surcharge is payable on tax underpaid if overdue for more than 28 days, as follows:

• after 28 days - 5% of the tax unpaid
• after 6 months - a further 5% of the tax unpaid

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The introduction of IR35 has been seen in a cynical light as a move by the Government and HMRC to close down tax saving benefits for contractors.  The legislation change came in to force in April 2000 and if you haven’t done so already,  it might be useful to at least acquaint yourself with what HMRC say about IR35 <by clicking here>.

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There are several approaches to bookkeeping - which can be something of a dirty word amongst business owners, is often the most unpopular past time within the business, and sadly is often done badly.

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