individual tax payment dates

Question 1

Class 1 EE NIC
Class 1 ER NIC
Class 1a ER NIC

Answer 1

paid monthly

paid by employer (EE NIC deducted from salary)

Question 2

What is the date for filing tax return

Answer 2

Tax return has to be filed on 31 january after end of fiscal year (9 months after fiscal year ends)

Question 3

When is class 2 NIC and CGT paid?

Answer 3

same date as tax return

Question 4

When is income tax and class 4 NIC paid?

Answer 4

paid in installments (in advance)

1) 31 jan during fiscal year (50% of last year liability)
2) 31 july after end of fiscal year (50% of last year liability)
3) 31 jan after end of fiscal year (based on actual return, and settlement of over/under payments)

Question 5

why is installment paid based on last year’s liability?

Answer 5

because tax is not final as fiscal year has not ended

Question 6

if a business is in loss or a person thinks that current year tax will be significantly less than previous year

Answer 6

then they can use budgeted tax instead of previous year liability as a basis to pay current year tax.

Question 7

why is 31 jan important

Answer 7

-tax return of prev fiscal year
-Class 2 NIC of prev fiscal year
-CGT of prev fiscal year
-final installment of income tax and class 4 NIC of prev year
-first installment of current fiscal year

Question 8

which people dont need to pay installments of income tax?

Answer 8

if income tax payable is less than 1000 pounds OR
80% or more income tax is paid in advance (eg. employment income, employer has paid tax in advance)

no need to pay installments.
Income tax will be paid on 31 Jan after end of current fiscal year

Question 9

CGT on residential property

Answer 9

payable in 30 days of disposal (as tax dept doesn’t like disposals of residential properties)

return to be filed in 30 days as well
expected bands usage, rates will be used
annual exemption and losses will be used according to availability at that date
this return will then be revised in final return and over/under payment can be adjusted

Question 10

when can CGT be paid in installments

Answer 10

2 situations:
-if proceeds are received in installments which exceed 18 months but less than 8 years, then CGT can be proportioned according to proceeds received in that particular fiscal year

-if asset was gifted but gift relief was not available. however, gifted asset must be land, building or shares. installment is of 10 years.