Self Employed? Make sure you know about changes to paying in your taxes from April 2014

The HMRC have made recent changes to the types of penalties that companies can incur, if the proper procedure is not undertaken and completed on time. The changes from the government come into effect from the 6th of April this year, and will be applied to the 2014 and 2015 returns. This will affect you if you are self employed, or an employer of staff in the UK. Essentially, you need to make sure that you are organised with your tax returns, or make sure that someone is organising them for you. The new implemented rules and regulations are as follows:

RTI Penalties

The RTI penalties after the 6th of April this year, will mean that all employers operating PAYE within their retrospective companies will be subject to the newly implemented sanctions. These new sanctions are as follows:

• If you are self employed or employing 1 – 9 employees the charge rests at £100 per month
• Employment of 10 – 40 people, the charge will be £200 per month
• If you employ 50 – 249 employees the charge will be a rather significant £300 per month

The penalties will occur if the follow measures have not been taken:

• Full and on time filing of tax to the HMRC with PAYE forms.
• Payments are received in full and on time for FPS
• Told the HMRC that no employees have been paid in a tax period

If you have not completed these tasks on time or not at all the following sanctions will apply:

• The first time that you are late with your submissions and payments, you will receive a notification letter from the HMRC. No sanctions will be taken.
• The second and third time that a late submission or payment is made, there will be a penalty charge on top of what you owe, which is 1% of the total tax that is owed.
• The fourth time that a late payment is made, the penalty raises to 2% of the total tax owed.
• On the sixth occasion the percentage raises to a 3% charge
• If these rules are broken ten times, the charge will be 5%, a significant amount of money to be paying on top of the amount you owe.

Seeing as these sanctions have come into place this year, if you are self employed as a contractor, or any other job in which you are relying on your own means to hand in taxes for the year, it is worthwhile using an accountancy firm. Bernard Rogers is a renowned Accountancy firm, so if you are looking for good accountants in Warwickshire, check them out online.

This article was written by Drew Rapley, a writer on self employment, taxation and accountancy.