It is quite overwhelming to many a business person or an individual in dealing with self-assessment tax payments and corporation tax. Again, taxes do change frequently with laws being passed from time to time, and with deadlines that need to be met in order not to attract penalties. In this, hopefully exhaustive, guide from Finex Outsourcing , these are explained in an easy to understand manner along with details of when and how you need to pay or, at the very least, inform the authorities about such matters as corporation tax and self-assessment. As an individual tax payer or a corporate entity, this guide is going to be of immense help to you in explaining matters relating to self assessment and corporation tax in terms of rates, filing and payment.

What is Self Assessment?

Self Assessment is an administrative system by which the HMRC self assessment or Her Majesty’s Revenue and Customs-get Income Tax. It demands people who have earned income other than their wages or salary to file a tax return every year.

This system is commonly used by:

Sole Traders: Self-employed people or who works for their own companies but not a legal entity or company.

Partners: People who own a business either together or as partners.

Directors of Limited Companies: Those with other sources of income or supplemental income which is not reflected on the company’s corporation tax return.

Self Assessment is one of the simplest and easy way by which people can have an idea about the total amount of tax that is to be paid to the government out of their total income and expenditures for the financial year. This process assists in making that the people and companies pay their taxes in the right amount without under or over paying.

Key Aspects of Self Assessment Tax Payments

Self Assessment Pay Tax: However, if your are among the individuals who are expected to file self-assessment tax returns, you are expected to make any tax payment before the HMRC deadline. If the payment is delayed, penalties and other forms of charges, including interest charges, have to be negotiated.

Self Assessment Limited Company: An individual who is a director of a limited company may be required to complete a self assessment if he has income which is not disclosed through the corporation tax return. This may be in form of dividend, rental income or any other sources of income outside the salary income.

Corporation Tax: An Overview

Corporation tax is one of the forms of direct taxation since it targets the profit making entities in a country. It is therefore distinct from personal level self-assessment and has concern with the financial position of the business. To be compliant, one must know how the rates are fixed, the filing procedures and the payment periods for the VAT.

Corporation Tax Self Assessment: Corporation Tax – Any corporation has to submit Corporation Tax and pay the amount due according to the profits earned. This return is not as close as personal self-assessment although the working is on the same lines as income and expense return.

Corporation Tax Rates 2023/24: For the tax year 2023/24, the marginal corporation tax rate applies at 25% to all the companies with profits over £ 250000. The standard rate for small businesses with annual profits below £ 50,000 is 19% the rest businesses with an amount of £ 250,000, there is a gradual rate applicable. As it goes with most tariffs, it is advisable to visit the HMRC website currently to check on the new updates as the rates may have changed.

Corporation Tax Rates 2024: The rate to be applicable in the year of taxation 2024 will be set by the government which may be different due to this change in the economic situations or policy. Be current with the information so that they can be in a position to make the right computation of tax.

Filing and Payment Deadlines

One should ensure that he or she meets the filing and payment deadlines so as not to be charged penalties and or interest. Here’s a breakdown of important deadlines for both self-assessment and corporation tax:

Self Assessment Deadlines: It is required that the companies complete and submit an online  self assessment tax return by January 31 the following the tax year end. Another reason is that for paper returns, the due date is October 31 of the relevant tax period.