As a business owner, it is important to be able to earn more than your target. It is a sign of a successful company if you can pay off your debts and generate income to support everyone in it. However, there are additional responsibilities for being such, and that includes paying corporation tax to the government.
Corporate tax or corporation tax refers to your liabilities as a company existing in a country. As you are here in the UK, you are under the jurisdiction of Her Majesty’s Revenue and Customs or HMRC. This non-ministerial department is responsible for tax collection. Always remember that these taxes are the ones used to support government activities. You can say that this is their income as well for allowing you to do business.
It is important to pay for it as soon as your fiscal year ends. Once the date approaches, you need to have your accountant/s ready for all the paperwork included. However, you should not wait before the deadline arrives to do anything. It is important to prepare as much as possible as this is the most hectic part of the year. You need to have an idea as to how much your tax liability is for this year, and that induces a lot of factors aside from overall income.
However, there are some cases wherein you might not be able to pay for it.
What happens next?
What happens when you are not able to pay of you corporation tax?
This will depend on your situation. For example, delays will always mean fines. One day of delay is £100. After 3 months, it is going to increase by another £100. If it reaches more than six months, it is going to be calculated against your annual income by 10%. By 12 months and more, another 10% is going to be added on top.
Take note. This will still be in effect even if you paid a partial amount. The current tax rate is at 2.75%/; however, it is going to be deducted depending on the percentage. Once you fail to pay, delayed payment, or try to outrun it, the HMRC can track you down and demand recompense. They can send letters or even contact you through phone and email.
What Can You Do
If you know that you cannot pay on time for your corporation tax, then you need to contact the support of HMRC. They can give you plans on how you can pay for it and when you can do so. It is possible to pay on an instalment basis, but this would depend on the case. Several plans can be deduced, and each company may have a different one to tackle various issues.
You can also file for losses if they are chasing for the previous year’s tax and your company is not performing as well. They can give deductions and sometimes even refunds after a strict review. You can also look for a lender to cover for the taxes. In the meantime, you can look for finance or insolvent firm to help you out; get in touch with Annette & Co. today for more information and catch the upcoming event this September, The Wealth Lab. They can also help you start again, and make your new venture more profitable.
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