Tax Returns – a guide for therapy businesses
Does the thought of tax returns fill you with dread?
Spend just five minutes reading this article and you will hopefully feel a lot more confident.
You’ll find out:
- what forms you need to fill in
- what types of tax you will have to pay
- where you can find more help
Tax year dates
Tax years run from 6 April to 5 April.
The different types of business tax
There are several different types, but the ones you need to know about are:
- Income Tax
- National Insurance
- Corporation Tax
- Capital Gains Tax
Sole traders – what you need to do
If you are a sole trader, you’ll need to register for Self-Assessment. Once a year, you will fill in a Self-Assessment form, and will be liable for Income Tax and National Insurance. You won’t have to worry about Corporation Tax. If you’re employed at the same time, that’s no problem - you simply need to fill in additional Employment sheets during your Self-Assessment.
Partnerships – what you need to do
Just like a sole trader, if you’re a partnership or a limited liability partnership you’ll need to register for Self-Assessment. Once a year, each partner will fill in a Self-Assessment form, and will be liable for Income Tax and National Insurance. They will also need to fill in the partnership supplementary pages (SA104). One nominated partner will also complete the Partnership Form (SA800), which gives information about each partner’s share of the profits or losses. Partnerships don’t need to pay Corporation Tax. Be aware that if the partnership return is not filed on time, every partner will be fined £100, even if their personal return was filed on time.
Limited companies – what you need to do
If you’re a limited company, you will need to register with HMRC as a new business. Each year, you will fill in a Company Tax Return (CT600) and pay any Corporation Tax owed. If you’re the Company Director, you’ll also have to register for Self-Assessment.
Self Assessment: paper or online?
You can fill out your self assessment form either online or in paper format. If you choose to fill it out online, you don’t have to do it all in one go - the system will save it as you go along. If you have any questions, you may find help on the HMRC website, or you can call for advice.
Self Assessment deadlines
If you choose to fill out a paper return, it must reach HMRC by midnight on 31st October. If you complete it online, you must submit it by midnight on 31st January. There are strict penalties if you are late. Find out more about deadlines and penalties on the HMRC website.
Capital Gains Tax
If you make a gain by selling, or disposing of an asset, you could be liable for Capital Gains Tax. An asset can be anything from property to shares, land or computer equipment. It also applies to personal possessions such as jewellery or antiques. Find out more about Capital Gains Tax here.
If you’re registered for VAT, you’ll have to submit a VAT return to HMRC. You’ll only need to register for VAT if your turnover is £85,000 or more in 2019/20. Find out more about VAT here.
Pay As You Earn (PAYE)
If you employ someone, you will need to collect their Income Tax and National Insurance through a system called PAYE, and will also have to pay separate National Insurance and your own Employer Annual Return. Find out more about PAYE here.
- Make sure you keep accurate records. Good record-keeping will help the taxation process run smoothly. Find out more about record-keeping here.
- Get a good accountant. They’ll give you all the help you’ll need with your tax return. Find out how to find a good accountant here.
- Visit the HMRC website to find out more about tax returns: