General Faqs
A Unique Taxpayer Reference (UTR) is a 10-digit code issued by HM Revenue and Customs (HMRC) in the UK. It’s used to uniquely identify individuals or businesses for tax purposes. If you’re self-employed, a sole trader, or own a limited company, you’ll need a UTR to complete your tax self-assessment.
You can find your UTR on various documents from HMRC, such as tax returns, payment reminders, or in your Personal Tax Account.
A UTR number is a 10-digit code given by HMRC to everyone, including individuals, companies, and partnerships. HMRC uses this number to identify you for filing tax returns and making tax payments.
Over-reporting and under-reporting in accounts can have serious consequences:
- Over-reporting: This means showing more income or profits than you actually have. It can lead to paying more taxes than necessary and might raise suspicion, leading to audits.
- Under-reporting: This means showing less income or profits than you actually have. It can result in paying less tax initially, but if discovered, it can lead to fines, penalties, and legal trouble.
Both practices can damage your credibility and trust with tax authorities. It’s important to report your accounts accurately to avoid these issues.
An HMRC Gateway account is an online portal provided by HM Revenue and Customs (HMRC) in the UK. It allows individuals and businesses to access various tax-related services online. To sign in, you need a 12-digit Government Gateway user ID and a password.
Corporation tax
Companies incorporated in the UK are automatically treated as resident in the UK for tax purposes. Exceptions can apply where a company is treated as resident outside the UK by way of a double tax treaty. Often tax treaties will refer to where the “effective management” is. This concept is based around where board meetings and decisions at the highest level are carried out. If this is outside the UK, the company may be treated as non resident. It is a very technical area of tax and usually requires careful consideration of the facts.
The scheme affects companies and subcontractors working in the construction sector. It covers structural or civil engineering work on roads and bridges and work carried out on a permanent or temporary building. Not all construction activities are included and architecture, carpet fitting and scaffolding, for example, are excluded from the scheme.
The construction industry scheme is similar to PAYE for employees in that it withholds tax from payments made by contractors to subcontractors.
Under the CIS Scheme, contractors deduct money from a subcontractor’s payments and pass it to HM Revenue and Customs (HMRC). These deductions count as advance payments towards the subcontractor’s tax liability. Contractors must register for the scheme. Subcontractors don’t have to register, but deductions are taken from their payments at a higher rate if they are not registered. Large companies working as subcontractors can apply for “gross payments status”, which exempts their payments from such deductions.
- CRN: This is a unique number given to your company when it is registered with Companies House. It helps identify your company legally.
- UTR: This is a unique number given by HMRC for tax purposes. It helps identify your company for tax matters.
Yes, you can amend your company’s corporation tax return up to 12 months after the filing deadline. You can do this either online or by submitting a paper return to HMRC.
You must submit your company’s tax return within 12 months after the end of the accounting period it covers.
Self assessment
UTR is a special 10-digit number that is assigned to each person in the UK who needs to pay taxes. It's like your personal tax ID. You need this number to file your tax returns, especially if you're self-employed or have other income. It helps the UK tax office (HMRC) keep track of your tax information.
Whether or not you need to complete a tax return while earning less than £10,000 will depend on the type of income you have received in the year.
If you fall into the following criteria a tax return will need to be completed:
- Landlords earning property income exceeding £2,500. For those individuals earning rental income between £1,000 and £2,499 you should contact HMRC to confirm your reporting obligations.
- Self-employed individuals with income exceeding the £1,000 trading allowance.
- Your total £10,000 was from investment income, such as savings and dividends.
- You received untaxed income exceeding £2,500.
There can be many reasons to complete a return and if you have concerns, speak with us, or contact HMRC.
- The income tax rates in UK for current tax year i.e. from 6 April 2023 to 5 April 2024 are as follows:
· Band
· Taxable income
· Tax rate
· Personal Allowance
· Up to £12,500
· 0%
· Basic rate
· £12,501 to £50,000
· 20%
· Higher rate
· £50,001 to £150,000
· 40%
· Additional rate
· over £150,000
· 45%
The due date for self-assessment tax return filing in the UK typically depends on whether you're filing online or on paper.
Online filing: The deadline is usually 31st January.
Paper filing: The deadline is usually 31st October.
However, it's important to note that these are general deadlines, and there may be exceptions or earlier deadlines in certain circumstances. For example, if you have a tax agent, the deadline might be different.
VAT
VAT number is a unique identification number assigned to businesses registered for Value-Added Tax (VAT) in the United Kingdom. It's used to identify a business for VAT purposes and is essential for various VAT-related activities.
- VAT returns:Businesses must submit VAT returns to HMRC, declaring the VAT they've charged and collected. The VAT number is used to identify the business and match it to its records.
- Trading with other businesses:When trading with other VAT-registered businesses within the UK or the EU, the VAT number is used for VAT reclaim purposes.
- Import and export:Businesses involved in international trade often need their VAT number for customs declarations and VAT calculations.
VAT rates in the UK can vary depending on the type of goods or services. Here's a general breakdown of the standard rates:
- Standard Rate:20%
- Reduced Rate:5%
- Zero Rate:0%
Some examples of goods and services that fall under each rate:
- Standard Rate:Most goods and services, including food and drink consumed on premises, clothing, and most household items.
- Reduced Rate:Domestic fuel and power, energy-saving materials, children's car seats, and certain sanitary products.
- Zero Rate:Essential food items, books, newspapers, and certain medical and educational supplies.
It's important to note that there may be specific exemptions or special rates for certain goods and services. For example, there is a flat rate scheme for smaller businesses, and certain export goods may be exempt from VAT.
There’s a time limit on how far back you can go to reclaim the VAT on purchases made before registering. The time limits are different for goods and services.
- For goods that you still have or have used to produce other goods you still have, you can reclaim VAT for up to 4 years.
- For services, you can reclaim VAT for up to 6 months.
Please remember that you can only reclaim VAT on supplies if your business is currently registered for VAT. Additionally, these supplies must be used exclusively for business purposes.
Under the Flat Rate Scheme:
- You pay a fixed percentage of VAT to HMRC.
- You keep the difference between the VAT you charge your customers and the VAT you pay to HMRC.
- You cannot reclaim VAT on most of your purchases, except for certain capital assets costing over £2,000.
To join the scheme, your VAT turnover must be £150,000 or less (excluding VAT), and you need to apply to HMRC.
You typically file a VAT return to HMRC every three months. This timeframe is referred to as your VAT accounting period. However, if you've chosen to participate in the VAT Annual Accounting Scheme, your VAT accounting period will be a full 12 months.
- Quarterly Returns: If you're on a standard VAT accounting scheme, you need to submit your VAT return every 3 months (quarterly). The exact dates depend on your VAT accounting period, which is set by HMRC. For example, if your accounting period ends on 31 March, 30 June, 30 September, or 31 December, you must submit your return and pay any VAT due within one month and 7 days of the end of the period.
- Annual Returns: If you're using the VAT Annual Accounting Scheme, you submit one VAT return per year. The deadline for this return is 2 months after the end of your 12-month accounting period. You may also need to make interim payments based on your estimated VAT liability.
- Making Tax Digital (MTD): If you're required to comply with MTD, you must submit your VAT return electronically through compatible software.
While zero-rated supplies don't attract VAT, you can still claim a VAT credit for the input tax (VAT paid on purchases used to make those supplies). This is because the purpose of the VAT credit is to ensure that businesses don't pay VAT on goods or services that are ultimately exempt or zero-rated.
To claim VAT credit on zero-rated supplies, you'll need to:
- Keep records: Maintain accurate records of your purchases and sales, including the VAT paid on purchases and the value of zero-rated supplies sold.
- Submit a VAT return: Report the VAT credit on your VAT return.
- Provide evidence: If requested by HMRC, you may need to provide evidence to support your claim.
PAYE (Pay As You Earn)
PAYE stands for Pay as You Earn. It is a UK system where your employer deducts income tax and National Insurance contributions directly from your salary or wages. This ensures that you pay your taxes throughout the year, rather than accumulating a substantial tax bill at the end of the year.
Form P45: Issued by your employer when you leave their employment, this form details your earnings and the tax and National Insurance contributions deducted.
Form P60: Issued annually by your employer, this form summarizes your total earnings, tax, and National Insurance contributions for the year, as well as any tax refunds or overpayments.
Form P11D: Used to report benefits in kind or expenses provided by your employer that may be taxable. This form is usually submitted by employers on behalf of their employees.
For PAYE compliance, you must maintain the following records:
- Employee Details: Full names, addresses, and National Insurance numbers.
- Payroll Records: Details of earnings, deductions, and net pay for each pay period.
- Tax and National Insurance Contributions: Records of the tax and National Insurance deducted from employees' salaries.
- Payment Records: Details of payments made to HMRC, including the amounts and dates.
- Leave and Absence Records: Information on employee leave, including sick leave and maternity/paternity leave.
- P45 and P60 Forms: Copies of P45 forms issued when an employee leaves and P60 forms issued annually summarizing earnings and deductions.
- P11D Forms: Records of any benefits in kind or expenses reported on P11D forms.
- Tax Codes: Details of the tax codes used for each employee.
PAYE reference number is a unique code assigned to UK employers by Her Majesty's Revenue and Customs (HMRC) for the purposes of administering the PAYE system.
It's essentially a way to identify your business for tax purposes, particularly when dealing with payroll and tax returns.
Once you successfully enrol for the corporation tax online service, you will receive a letter containing the activation code within 7 days of enrolment. This code be done by signing in for HMRC online services and enrolling of the services again.
If your business is new, you will need to file your first accounts within 21 months after registering with Companies House. For existing companies, you will need to file within nine months after your company's financial year ends.
You need to file your company’s tax return within 12 months from the end of an accounting period to which it relates.
A separate deadline to pay your Corporation Tax bill. It's usually 9 months and one day after the end of the accounting period.
The penalty for late submission as below-
Length of period (measured from the date the accounts are due) | Penalty for a private company or LLP | Penalty for a public company |
Not more than 1 month | £150 | £750 |
More than 1 month but not more than 3 months | £375 | £1,500 |
More than 3 months but not more than 6 months | £750 | £3,000 |
More than 6 months | £1,500 | £1,500 |
If you do not file your Company Tax Return by the deadline you’ll have to pay Penalties as below-
Time after your deadline | Penalty |
1 Day | £100 |
3 Months | £100 Another |
6 Months | HMRC will estimate your Corporation Tax bill and add a penalty of 10% the unpaid tax |
12 Months | Another 10% of any unpaid tax |
If a participator (i.e., director) receives loan from his company and does not pay back within 9 months and 1 day after the end of accounting period, tax is charged at the rate of 33.75% of the outstanding loan balance (32.5% before 6 April 2022).
Even if the loan account was overdrawn at the end of the accounting period, the section 455 charge can be avoided if the loan is cleared by the corporation tax due date of nine months and one day after the end of the period.
Under the Construction Industry Scheme ( CIS ), contractors deduct money from a subcontractor's payments and pass it to HM Revenue and Customs ( HMRC ). The deductions count as advance payments towards the subcontractor's tax and National Insurance. Contractors must register for the scheme.
The date, which is company registered on companies house.
A company registration number(CRN) is a unique eight-character code assigned to incorporated businesses in the UK.
A Unique Taxpayer Reference number (UTR) is a 10-digit code that uniquely identifies you or your business.
UTRs are used by HMRC whenever they're dealing with your tax situation.
A VAT number is a unique identification number given to VAT-registered businesses. In England, Scotland and Wales, a VAT number is a nine-digit code with the prefix 'GB'. VAT numbers are issued by HMRC.
In the UK, the VAT registration threshold is currently £85,000 (2023), and the most recent UK VAT thresholds are: 2014-2015: £81,000. 2015-2016: £82,000.
PAYE is HM Revenue and Customs' ( HMRC ) system to collect Income Tax and National Insurance from employment. You do not need to register for PAYE if none of your employees are paid £123 or more a week, get expenses and benefits, have another job or get a pension. However, you must keep payroll records.
The reference number consists of two parts: a three-digit HMRC office number, and a reference number unique to your business. Usually it looks something like 123/A56789 or 123/AB56789, with some exceptions. You will need your employer PAYE reference number for many different reasons.
It defines a micro entity as meeting at least two of the following criteria:
- Your company's annual turnover does not exceed £632,000.
- Your business has £316,000 or less on its balance sheet.
- You have 10 or fewer employees.
It defines a micro entity as below-
- Your company's annual turnover exceed £632,000.
- Your business has £316,000 or more on its balance sheet.
- You have 10 or fewer employees.
What does a Government Gateway user ID