Business Start-Up

A significant task for the new business owner is assuring that the business is properly complying with the extensive tax and information filing requirements imposed by the various authorities. Problems and penalties could arise if the new business is not registered with the appropriate tax authorities in a timely fashion. While this chapter is not intended to be an all-inclusive list of filing requirements, it summarises some of the more prominent requirements common to most businesses.

It is necessary to notify the Inland Revenue of your existence by completing forms CT41G (companies) and CWF1 (sole traders/partnerships). The form notifies the Inland Revenue of your accounting date, your accountant, and also enables a PAYE (Pay As You Earn Scheme) to be set up, which is a requirement if you are to be an employer.

If you fail to register within the first three full months of self-employment a penalty of £100 may be levied.

Depending on the level of profit, sole traders and partners have a liability to Class II NIC, and these are payable either quarterly or monthly by direct debit. Class 2 contributions are at a weekly level of £2.00 (where annual earnings are £4,095 or more for 2003/04) and the necessary form to collect Class 2 contributions should be completed at the same time as the form CWF1. Leaflet CA02 ’National Insurance contributions for self-employed people with small earnings’ gives full details and an application form for exemption from liability.

You need to consider if it is beneficial to be VAT registered from the outset. The pros and cons are discussed in Chapter 5. If you are registering for VAT, form VAT 1 needs to be completed and, if you are a partnership, you must give details of all the partners on form VAT 2.

The following summarises some of the more significant filing dates for a corporation using a calendar year end. Many of these requirements also apply to partnerships and sole traders. Naturally, if a year-end other than 31 December is used, some of these dates will vary.

Date - Return

19 May - Submission of forms P35 and P14’s

6 July - Submission of form P11D

19 July - Payment of Class 1A NIC

30 September - Payment of corporation tax

November/December - Year end tax planning

31 December - Submission of corporation tax return (12 months after the accounting period)

Date - Return

Monthly on 19th - Payment of payroll taxes (under certain circumstances - quarterly)

Date - Return

14 April, 14 July - Forms CT61 to be submitted - tax deducted/received

14 October - on interest payments

14 January, 5 July, 5 October - Form P46 (car) - notification of change of car

5 January, 5 April - Quarterly VAT returns (although these can be monthly).

YANNONS CHARTERED ACCOUNTANTS have devised an interactive screen-saver, the Financial Date Monitor, which calculates all key dates and deadlines applicable to your particular circumstances. It works as a memory-jogger by providing an on-screen reminder of the dates in question for each of the seven days leading up to the deadline. This is available free of charge to all our clients.