With many in the catering equipment supply chain being self-employed, these businesses may be using the self-assessment system to pay tax.
However, newcomers to the self-assessment system may be unaware that they are expected to make twice yearly ‘payments on account’ to their self-assessment tax account, with the next deadline at the end of July, underlined tax preparation specialist David Redfern, director of DSR Tax Claims.
Taxpayers who are responsible for settling their own tax bill, rather than being taxed by an employer or pension provider through PAYE, are required to use HMRC’s self-assessment system to calculate and settle their annual tax bill.
Redfern explained: “It’s not just those who are self-employed who are expected to register for self-assessment and submit an annual tax return – you may also be required to submit a self-assessment tax return if you are employed but have additional earnings, perhaps through a business you run outside your main PAYE employment. Similarly, if you wish to claim tax relief on expenses of more than £2,500 in any tax year, you need to do this by completing and submitting a tax return.”
Where taxpayers owe tax to HMRC, they are expected to make two payments on account to HMRC as an advance payment towards any tax they may owe in the forthcoming tax year. The first is due on 31 January in line with the self-assessment submission deadline. However a second payment is due on 31 July and this deadline now looms for taxpayers who are responsible for settling their own tax bill.
Redfern stated: “It would be pretty hard to miss the 31 January deadline because it gets so much media coverage but the 31 July payment on account deadline is often forgotten about due to it receiving far less attention.
“Those who have been taking care of their taxes for years will be familiar with the self-assessment calendar, but for newcomers to self-assessment this July deadline is often easily missed. If you have tax to pay from the tax year 2018/19 and you have not yet settled that tax bill in full, you will need to make a payment on account to HMRC.”