Enter Your E-mail

Busy Practitioner by Mark McLaughlin ATII TEP

This article outlines some key deadlines and practice points for accountants and tax practitioners.

30 September 2002

Tax returns for 2001/02 must be received no later than this date for taxpayers who wish the Inland Revenue to calculate their tax and, if applicable, Class 4 National Insurance liabilities. However, the deadline for a Revenue tax calculation is extended to two months from the issue of the notice requiring the return, if later.

If the deadline is missed, in practice the Revenue will still calculate the taxpayer’s liabilities, but cannot guarantee doing so by the due date for payment (normally 31 January 2003, or three months after the issue of the return form, if later).

30 September 2002 is also the submission deadline for taxpayers who would like the Revenue to collect their 2001/02 tax underpayments of less than £2,000 by adjustment to their future pay as you earn tax codes.

5 October 2002

The Inland Revenue must be notified of any 2001/02 income tax or capital gains tax liabilities by this date, in respect of those taxpayers who have not already received a self- assessment return for that year. Taxpayers affected include, for example, individuals in receipt of untaxed income or gains or those becoming liable to higher rates of tax for the first time.

The penalty for failing to notify is based on the net tax due, but unpaid, at 31 January following the tax year in which the liability arises. Consequently, no late notification penalty should arise of this deadline is missed, if all tax has been paid by 31 January 2003 (in accordance with TMA 1970, s 7(8)).

There is a separate notification requirement for the newly self-employed. Sole traders and partners who become liable to pay Class 2 National Insurance contributions must notify the Revenue within 3 months from the end of the month in which the self-employment commenced, to avoid a possible £100 fixed penalty.

Notification can be made by completing form CWF1, which is included in Leaflet P/SE/1: Thinking of working for yourself? Anyone who registers for Class 2 National Insurance contributions is automatically registered for income tax self-assessment. Both the form and the leaflet can be downloaded from the Revenue’s website (http://www.inlandrevenue.gov.uk/startingup/index.htm).

19 October 2002

Employers with a PAYE Settlement Agreement (a ‘PSA’) for 2001/02 must pay their tax due under the PSA to the Revenue by 19 October. This is also the due date for payment of Class 1B National Insurance contributions by the employer, if the PSA was agreed before the due date for Class 1 or Class 1A National Insurance contributions on expenses or benefits subject to the agreement (i.e. those which are ‘minor’, ‘irregular’ or are such that it would be impractical to operate pay as you earn or deduct National Insurance contributions from them, or to include them on the employee’s form P11D or P9D (see the Revenue’s National Insurance Manual, paragraph 18110).